Correlation Between Zhihu and Under Armour
Can any of the company-specific risk be diversified away by investing in both Zhihu and Under Armour 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 Under Armour 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 Under Armour C, you can compare the effects of market volatilities on Zhihu and Under Armour 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 Under Armour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Under Armour.
Diversification Opportunities for Zhihu and Under Armour
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Zhihu and Under is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Under Armour C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Under Armour C 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 Under Armour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Under Armour C has no effect on the direction of Zhihu i.e., Zhihu and Under Armour go up and down completely randomly.
Pair Corralation between Zhihu and Under Armour
Allowing for the 90-day total investment horizon Zhihu is expected to generate 1.67 times less return on investment than Under Armour. In addition to that, Zhihu is 1.04 times more volatile than Under Armour C. It trades about 0.04 of its total potential returns per unit of risk. Under Armour C is currently generating about 0.07 per unit of volatility. If you would invest 681.00 in Under Armour C on September 2, 2024 and sell it today you would earn a total of 196.00 from holding Under Armour C or generate 28.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Under Armour C
Performance |
| Timeline |
| Zhihu Inc ADR |
| Under Armour C |
Zhihu and Under Armour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Under Armour
The main advantage of trading using opposite Zhihu and Under Armour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Under Armour 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 Under Armour will offset losses from the drop in Under Armour's long position.The idea behind Zhihu Inc ADR and Under Armour C 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.| Under Armour vs. Levi Strauss Co | Under Armour vs. Columbia Sportswear | Under Armour vs. Hanesbrands | Under Armour vs. PVH 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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