Correlation Between Zhihu and Cabo Drilling
Can any of the company-specific risk be diversified away by investing in both Zhihu and Cabo Drilling 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 Cabo Drilling 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 Cabo Drilling Corp, you can compare the effects of market volatilities on Zhihu and Cabo Drilling 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 Cabo Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Cabo Drilling.
Diversification Opportunities for Zhihu and Cabo Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zhihu and Cabo is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Cabo Drilling Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cabo Drilling 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 Cabo Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cabo Drilling Corp has no effect on the direction of Zhihu i.e., Zhihu and Cabo Drilling go up and down completely randomly.
Pair Corralation between Zhihu and Cabo Drilling
If you would invest 319.00 in Zhihu Inc ADR on November 4, 2024 and sell it today you would earn a total of 32.00 from holding Zhihu Inc ADR or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Cabo Drilling Corp
Performance |
| Timeline |
| Zhihu Inc ADR |
| Cabo Drilling Corp |
Zhihu and Cabo Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Cabo Drilling
The main advantage of trading using opposite Zhihu and Cabo Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Cabo Drilling 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 Cabo Drilling will offset losses from the drop in Cabo Drilling's long position.The idea behind Zhihu Inc ADR and Cabo Drilling 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.| Cabo Drilling vs. Elite Education Group | Cabo Drilling vs. Gannett Co | Cabo Drilling vs. Pinterest | Cabo Drilling vs. Afya |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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