Correlation Between Zhihu and Konami Holdings
Can any of the company-specific risk be diversified away by investing in both Zhihu and Konami Holdings 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 Konami Holdings 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 Konami Holdings, you can compare the effects of market volatilities on Zhihu and Konami Holdings 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 Konami Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Konami Holdings.
Diversification Opportunities for Zhihu and Konami Holdings
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhihu and Konami is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Konami Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Konami Holdings 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 Konami Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Konami Holdings has no effect on the direction of Zhihu i.e., Zhihu and Konami Holdings go up and down completely randomly.
Pair Corralation between Zhihu and Konami Holdings
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Konami Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Zhihu Inc ADR is 1.54 times less risky than Konami Holdings. The stock trades about -0.04 of its potential returns per unit of risk. The Konami Holdings is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 4,632 in Konami Holdings on November 2, 2024 and sell it today you would earn a total of 856.00 from holding Konami Holdings or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 1.62% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Konami Holdings
Performance |
| Timeline |
| Zhihu Inc ADR |
| Konami Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Zhihu and Konami Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Konami Holdings
The main advantage of trading using opposite Zhihu and Konami Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Konami Holdings 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 Konami Holdings will offset losses from the drop in Konami Holdings' long position.The idea behind Zhihu Inc ADR and Konami Holdings 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.| Konami Holdings vs. Cheche Group Class | Konami Holdings vs. Neogen | Konami Holdings vs. CDW Corp | Konami Holdings vs. Zhihu Inc ADR |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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