Correlation Between Zhihu and Tinybeans Group
Can any of the company-specific risk be diversified away by investing in both Zhihu and Tinybeans Group 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 Tinybeans Group 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 Tinybeans Group Limited, you can compare the effects of market volatilities on Zhihu and Tinybeans Group 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 Tinybeans Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Tinybeans Group.
Diversification Opportunities for Zhihu and Tinybeans Group
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Zhihu and Tinybeans is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Tinybeans Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinybeans Group 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 Tinybeans Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinybeans Group has no effect on the direction of Zhihu i.e., Zhihu and Tinybeans Group go up and down completely randomly.
Pair Corralation between Zhihu and Tinybeans Group
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Tinybeans Group. But the stock apears to be less risky and, when comparing its historical volatility, Zhihu Inc ADR is 5.9 times less risky than Tinybeans Group. The stock trades about -0.03 of its potential returns per unit of risk. The Tinybeans Group Limited is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 20.00 in Tinybeans Group Limited on October 25, 2024 and sell it today you would lose (19.70) from holding Tinybeans Group Limited or give up 98.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Tinybeans Group Limited
Performance |
| Timeline |
| Zhihu Inc ADR |
| Tinybeans Group |
Zhihu and Tinybeans Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Tinybeans Group
The main advantage of trading using opposite Zhihu and Tinybeans Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Tinybeans Group 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 Tinybeans Group will offset losses from the drop in Tinybeans Group's long position.The idea behind Zhihu Inc ADR and Tinybeans Group Limited 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.| Tinybeans Group vs. Modine Manufacturing | Tinybeans Group vs. Zhihu Inc ADR | Tinybeans Group vs. Vulcan Materials | Tinybeans Group vs. Playtika Holding 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Stocks Directory Find actively traded stocks across global markets | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |