Correlation Between Zhihu and PennantPark Investment
Can any of the company-specific risk be diversified away by investing in both Zhihu and PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment, you can compare the effects of market volatilities on Zhihu and PennantPark Investment 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 PennantPark Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and PennantPark Investment.
Diversification Opportunities for Zhihu and PennantPark Investment
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhihu and PennantPark is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and PennantPark Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PennantPark Investment 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 PennantPark Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PennantPark Investment has no effect on the direction of Zhihu i.e., Zhihu and PennantPark Investment go up and down completely randomly.
Pair Corralation between Zhihu and PennantPark Investment
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 3.06 times more return on investment than PennantPark Investment. However, Zhihu is 3.06 times more volatile than PennantPark Investment. It trades about 0.03 of its potential returns per unit of risk. PennantPark Investment is currently generating about -0.03 per unit of risk. If you would invest 357.00 in Zhihu Inc ADR on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Zhihu Inc ADR or generate 0.56% 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. PennantPark Investment
Performance |
| Timeline |
| Zhihu Inc ADR |
| PennantPark Investment |
Zhihu and PennantPark Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and PennantPark Investment
The main advantage of trading using opposite Zhihu and PennantPark Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, PennantPark Investment 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 PennantPark Investment will offset losses from the drop in PennantPark Investment's long position.| Zhihu vs. Tencent Music Entertainment | Zhihu vs. Weibo Corp | Zhihu vs. DouYu International Holdings | Zhihu vs. Baidu Inc |
| PennantPark Investment vs. Visa Class A | PennantPark Investment vs. Diamond Hill Investment | PennantPark Investment vs. Distoken Acquisition | PennantPark Investment vs. Associated Capital Group |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk |