Correlation Between Zhihu and Cirmaker Technology
Can any of the company-specific risk be diversified away by investing in both Zhihu and Cirmaker Technology 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 Cirmaker Technology 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 Cirmaker Technology, you can compare the effects of market volatilities on Zhihu and Cirmaker Technology 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 Cirmaker Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Cirmaker Technology.
Diversification Opportunities for Zhihu and Cirmaker Technology
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhihu and Cirmaker is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Cirmaker Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirmaker Technology 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 Cirmaker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirmaker Technology has no effect on the direction of Zhihu i.e., Zhihu and Cirmaker Technology go up and down completely randomly.
Pair Corralation between Zhihu and Cirmaker Technology
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Cirmaker Technology. But the stock apears to be less risky and, when comparing its historical volatility, Zhihu Inc ADR is 18.13 times less risky than Cirmaker Technology. The stock trades about -0.01 of its potential returns per unit of risk. The Cirmaker Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Cirmaker Technology on November 3, 2024 and sell it today you would earn a total of 6.99 from holding Cirmaker Technology or generate 69900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Cirmaker Technology
Performance |
| Timeline |
| Zhihu Inc ADR |
| Cirmaker Technology |
Zhihu and Cirmaker Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Cirmaker Technology
The main advantage of trading using opposite Zhihu and Cirmaker Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Cirmaker Technology 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 Cirmaker Technology will offset losses from the drop in Cirmaker Technology's long position.The idea behind Zhihu Inc ADR and Cirmaker Technology 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.| Cirmaker Technology vs. PennantPark Investment | Cirmaker Technology vs. Black Hills | Cirmaker Technology vs. FitLife Brands, Common | Cirmaker Technology vs. Sysco |
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 CEOs Directory module to screen CEOs from public companies around the world.
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