Correlation Between Zhihu and Cimpress
Can any of the company-specific risk be diversified away by investing in both Zhihu and Cimpress 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 Cimpress 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 Cimpress NV, you can compare the effects of market volatilities on Zhihu and Cimpress 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 Cimpress. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Cimpress.
Diversification Opportunities for Zhihu and Cimpress
Excellent diversification
The 3 months correlation between Zhihu and Cimpress is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Cimpress NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cimpress NV 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 Cimpress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cimpress NV has no effect on the direction of Zhihu i.e., Zhihu and Cimpress go up and down completely randomly.
Pair Corralation between Zhihu and Cimpress
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 1.61 times more return on investment than Cimpress. However, Zhihu is 1.61 times more volatile than Cimpress NV. It trades about 0.2 of its potential returns per unit of risk. Cimpress NV is currently generating about -0.33 per unit of risk. If you would invest 362.00 in Zhihu Inc ADR on November 30, 2024 and sell it today you would earn a total of 149.00 from holding Zhihu Inc ADR or generate 41.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Cimpress NV
Performance |
| Timeline |
| Zhihu Inc ADR |
| Cimpress NV |
Zhihu and Cimpress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Cimpress
The main advantage of trading using opposite Zhihu and Cimpress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Cimpress 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 Cimpress will offset losses from the drop in Cimpress' long position.The idea behind Zhihu Inc ADR and Cimpress NV 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.| Cimpress vs. Deluxe | Cimpress vs. Omnicom Group | Cimpress vs. Emerald Expositions Events | Cimpress vs. QuinStreet |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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