Correlation Between Zhihu and Lifeist Wellness
Can any of the company-specific risk be diversified away by investing in both Zhihu and Lifeist Wellness 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 Lifeist Wellness 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 Lifeist Wellness, you can compare the effects of market volatilities on Zhihu and Lifeist Wellness 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 Lifeist Wellness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Lifeist Wellness.
Diversification Opportunities for Zhihu and Lifeist Wellness
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhihu and Lifeist is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Lifeist Wellness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifeist Wellness 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 Lifeist Wellness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifeist Wellness has no effect on the direction of Zhihu i.e., Zhihu and Lifeist Wellness go up and down completely randomly.
Pair Corralation between Zhihu and Lifeist Wellness
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 0.34 times more return on investment than Lifeist Wellness. However, Zhihu Inc ADR is 2.95 times less risky than Lifeist Wellness. It trades about 0.17 of its potential returns per unit of risk. Lifeist Wellness is currently generating about 0.02 per unit of risk. If you would invest 334.00 in Zhihu Inc ADR on September 12, 2024 and sell it today you would earn a total of 48.00 from holding Zhihu Inc ADR or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Lifeist Wellness
Performance |
| Timeline |
| Zhihu Inc ADR |
| Lifeist Wellness |
Zhihu and Lifeist Wellness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Lifeist Wellness
The main advantage of trading using opposite Zhihu and Lifeist Wellness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Lifeist Wellness 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 Lifeist Wellness will offset losses from the drop in Lifeist Wellness' long position.| Zhihu vs. Twilio Inc | Zhihu vs. Meta Platforms | Zhihu vs. Alphabet Inc Class C | Zhihu vs. Alphabet Inc Class A |
| Lifeist Wellness vs. NetSol Technologies | Lifeist Wellness vs. Zhihu Inc ADR | Lifeist Wellness vs. Hurco Companies | Lifeist Wellness vs. Sapiens International |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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