Correlation Between Zhihu and Bowen Acquisition
Can any of the company-specific risk be diversified away by investing in both Zhihu and Bowen Acquisition at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Zhihu and Bowen Acquisition into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zhihu Inc ADR and Bowen Acquisition Corp, you can compare the effects of market volatilities on Zhihu and Bowen Acquisition and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Zhihu with a short position of Bowen Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Bowen Acquisition.
Diversification Opportunities for Zhihu and Bowen Acquisition
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Zhihu and Bowen is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Bowen Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowen Acquisition Corp and Zhihu is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Zhihu Inc ADR are associated (or correlated) with Bowen Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowen Acquisition Corp has no effect on the direction of Zhihu i.e., Zhihu and Bowen Acquisition go up and down completely randomly.
Pair Corralation between Zhihu and Bowen Acquisition
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 0.21 times more return on investment than Bowen Acquisition. However, Zhihu Inc ADR is 4.73 times less risky than Bowen Acquisition. It trades about -0.01 of its potential returns per unit of risk. Bowen Acquisition Corp is currently generating about -0.23 per unit of risk. If you would invest 354.00 in Zhihu Inc ADR on November 3, 2024 and sell it today you would lose (3.00) from holding Zhihu Inc ADR or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Bowen Acquisition Corp
Performance |
| Timeline |
| Zhihu Inc ADR |
| Bowen Acquisition Corp |
Zhihu and Bowen Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Bowen Acquisition
The main advantage of trading using opposite Zhihu and Bowen Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Bowen Acquisition can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bowen Acquisition will offset losses from the drop in Bowen Acquisition's long position.The idea behind Zhihu Inc ADR and Bowen Acquisition Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bowen Acquisition vs. Broadleaf Co | Bowen Acquisition vs. Proficient Auto Logistics, | Bowen Acquisition vs. Ihuman Inc | Bowen Acquisition vs. Allient |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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