Correlation Between Zhihu and Telephone
Can any of the company-specific risk be diversified away by investing in both Zhihu and Telephone 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 Telephone 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 Telephone and Data, you can compare the effects of market volatilities on Zhihu and Telephone 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 Telephone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Telephone.
Diversification Opportunities for Zhihu and Telephone
Very good diversification
The 3 months correlation between Zhihu and Telephone is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Telephone and Data in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telephone and Data 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 Telephone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telephone and Data has no effect on the direction of Zhihu i.e., Zhihu and Telephone go up and down completely randomly.
Pair Corralation between Zhihu and Telephone
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Telephone. In addition to that, Zhihu is 1.62 times more volatile than Telephone and Data. It trades about -0.04 of its total potential returns per unit of risk. Telephone and Data is currently generating about 0.04 per unit of volatility. If you would invest 1,382 in Telephone and Data on November 9, 2024 and sell it today you would earn a total of 547.00 from holding Telephone and Data or generate 39.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Telephone and Data
Performance |
| Timeline |
| Zhihu Inc ADR |
| Telephone and Data |
Zhihu and Telephone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Telephone
The main advantage of trading using opposite Zhihu and Telephone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Telephone 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 Telephone will offset losses from the drop in Telephone's long position.The idea behind Zhihu Inc ADR and Telephone and Data 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.| Telephone vs. Telephone and Data | Telephone vs. ATT Inc | Telephone vs. Liberty Broadband Corp | Telephone vs. SiriusPoint |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets |