Correlation Between Zhihu and Manchester United
Can any of the company-specific risk be diversified away by investing in both Zhihu and Manchester United 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 Manchester United 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 Manchester United, you can compare the effects of market volatilities on Zhihu and Manchester United 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 Manchester United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Manchester United.
Diversification Opportunities for Zhihu and Manchester United
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhihu and Manchester is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Manchester United in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manchester United 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 Manchester United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manchester United has no effect on the direction of Zhihu i.e., Zhihu and Manchester United go up and down completely randomly.
Pair Corralation between Zhihu and Manchester United
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Manchester United. In addition to that, Zhihu is 2.0 times more volatile than Manchester United. It trades about -0.31 of its total potential returns per unit of risk. Manchester United is currently generating about 0.02 per unit of volatility. If you would invest 1,362 in Manchester United on January 14, 2025 and sell it today you would earn a total of 6.00 from holding Manchester United or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Manchester United
Performance |
| Timeline |
| Zhihu Inc ADR |
| Manchester United |
Zhihu and Manchester United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Manchester United
The main advantage of trading using opposite Zhihu and Manchester United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Manchester United 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 Manchester United will offset losses from the drop in Manchester United's long position.The idea behind Zhihu Inc ADR and Manchester United 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.| Manchester United vs. Live Nation Entertainment | Manchester United vs. Warner Music Group | Manchester United vs. Liberty Media | Manchester United vs. Sphere Entertainment Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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