Correlation Between Zhihu and MoneyHero Limited
Can any of the company-specific risk be diversified away by investing in both Zhihu and MoneyHero Limited 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 MoneyHero Limited 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 MoneyHero Limited Class, you can compare the effects of market volatilities on Zhihu and MoneyHero Limited 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 MoneyHero Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and MoneyHero Limited.
Diversification Opportunities for Zhihu and MoneyHero Limited
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zhihu and MoneyHero is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and MoneyHero Limited Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneyHero Limited Class 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 MoneyHero Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneyHero Limited Class has no effect on the direction of Zhihu i.e., Zhihu and MoneyHero Limited go up and down completely randomly.
Pair Corralation between Zhihu and MoneyHero Limited
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 0.53 times more return on investment than MoneyHero Limited. However, Zhihu Inc ADR is 1.9 times less risky than MoneyHero Limited. It trades about -0.02 of its potential returns per unit of risk. MoneyHero Limited Class is currently generating about -0.02 per unit of risk. If you would invest 479.00 in Zhihu Inc ADR on August 27, 2024 and sell it today you would lose (119.00) from holding Zhihu Inc ADR or give up 24.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. MoneyHero Limited Class
Performance |
| Timeline |
| Zhihu Inc ADR |
| MoneyHero Limited Class |
Zhihu and MoneyHero Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and MoneyHero Limited
The main advantage of trading using opposite Zhihu and MoneyHero Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, MoneyHero Limited 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 MoneyHero Limited will offset losses from the drop in MoneyHero Limited's long position.The idea behind Zhihu Inc ADR and MoneyHero Limited Class 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.| MoneyHero Limited vs. Alphabet Inc Class C | MoneyHero Limited vs. Twilio Inc | MoneyHero Limited vs. Snap Inc | MoneyHero Limited vs. Baidu Inc |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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