Correlation Between Zhihu and Integrated Drilling
Can any of the company-specific risk be diversified away by investing in both Zhihu and Integrated 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 Integrated 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 Integrated Drilling Equipment, you can compare the effects of market volatilities on Zhihu and Integrated 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 Integrated Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Integrated Drilling.
Diversification Opportunities for Zhihu and Integrated Drilling
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Zhihu and Integrated is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Integrated Drilling Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Drilling 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 Integrated Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Drilling has no effect on the direction of Zhihu i.e., Zhihu and Integrated Drilling go up and down completely randomly.
Pair Corralation between Zhihu and Integrated Drilling
If you would invest 366.00 in Zhihu Inc ADR on August 30, 2024 and sell it today you would earn a total of 18.00 from holding Zhihu Inc ADR or generate 4.92% 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. Integrated Drilling Equipment
Performance |
| Timeline |
| Zhihu Inc ADR |
| Integrated Drilling |
Zhihu and Integrated Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Integrated Drilling
The main advantage of trading using opposite Zhihu and Integrated Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Integrated 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 Integrated Drilling will offset losses from the drop in Integrated Drilling's long position.The idea behind Zhihu Inc ADR and Integrated Drilling Equipment 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.| Integrated Drilling vs. NioCorp Developments Ltd | Integrated Drilling vs. Harmony Gold Mining | Integrated Drilling vs. Precision Drilling | Integrated Drilling vs. Electrovaya Common Shares |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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