Correlation Between Zhihu and Presidio Property
Can any of the company-specific risk be diversified away by investing in both Zhihu and Presidio Property 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 Presidio Property 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 Presidio Property Trust, you can compare the effects of market volatilities on Zhihu and Presidio Property 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 Presidio Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Presidio Property.
Diversification Opportunities for Zhihu and Presidio Property
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Zhihu and Presidio is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Presidio Property Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Presidio Property Trust 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 Presidio Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Presidio Property Trust has no effect on the direction of Zhihu i.e., Zhihu and Presidio Property go up and down completely randomly.
Pair Corralation between Zhihu and Presidio Property
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 0.68 times more return on investment than Presidio Property. However, Zhihu Inc ADR is 1.48 times less risky than Presidio Property. It trades about -0.01 of its potential returns per unit of risk. Presidio Property Trust is currently generating about -0.05 per unit of risk. If you would invest 369.00 in Zhihu Inc ADR on August 29, 2024 and sell it today you would lose (9.00) from holding Zhihu Inc ADR or give up 2.44% 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. Presidio Property Trust
Performance |
| Timeline |
| Zhihu Inc ADR |
| Presidio Property Trust |
Zhihu and Presidio Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Presidio Property
The main advantage of trading using opposite Zhihu and Presidio Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Presidio Property 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 Presidio Property will offset losses from the drop in Presidio Property's long position.The idea behind Zhihu Inc ADR and Presidio Property Trust 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.| Presidio Property vs. Investcorp Credit Management | Presidio Property vs. Medalist Diversified Reit | Presidio Property vs. Mingzhu Logistics Holdings |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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