Correlation Between Zhihu and Magnite
Can any of the company-specific risk be diversified away by investing in both Zhihu and Magnite 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 Magnite 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 Magnite, you can compare the effects of market volatilities on Zhihu and Magnite 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 Magnite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Magnite.
Diversification Opportunities for Zhihu and Magnite
Very good diversification
The 3 months correlation between Zhihu and Magnite is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Magnite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Magnite 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 Magnite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Magnite has no effect on the direction of Zhihu i.e., Zhihu and Magnite go up and down completely randomly.
Pair Corralation between Zhihu and Magnite
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Magnite. But the stock apears to be less risky and, when comparing its historical volatility, Zhihu Inc ADR is 1.05 times less risky than Magnite. The stock trades about -0.01 of its potential returns per unit of risk. The Magnite is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 885.00 in Magnite on August 28, 2024 and sell it today you would earn a total of 775.00 from holding Magnite or generate 87.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Magnite
Performance |
| Timeline |
| Zhihu Inc ADR |
| Magnite |
Zhihu and Magnite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Magnite
The main advantage of trading using opposite Zhihu and Magnite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Magnite 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 Magnite will offset losses from the drop in Magnite's long position.The idea behind Zhihu Inc ADR and Magnite 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.| Magnite vs. Deluxe | Magnite vs. Clear Channel Outdoor | Magnite vs. Entravision Communications | Magnite vs. Innovid Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |