Correlation Between Zhihu and 42225UAF1
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By analyzing existing cross correlation between Zhihu Inc ADR and HEALTHCARE TR AMER, you can compare the effects of market volatilities on Zhihu and 42225UAF1 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 42225UAF1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and 42225UAF1.
Diversification Opportunities for Zhihu and 42225UAF1
Modest diversification
The 3 months correlation between Zhihu and 42225UAF1 is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and HEALTHCARE TR AMER in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE TR AMER 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 42225UAF1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE TR AMER has no effect on the direction of Zhihu i.e., Zhihu and 42225UAF1 go up and down completely randomly.
Pair Corralation between Zhihu and 42225UAF1
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the 42225UAF1. In addition to that, Zhihu is 7.66 times more volatile than HEALTHCARE TR AMER. It trades about -0.01 of its total potential returns per unit of risk. HEALTHCARE TR AMER is currently generating about 0.0 per unit of volatility. If you would invest 9,460 in HEALTHCARE TR AMER on September 3, 2024 and sell it today you would lose (23.00) from holding HEALTHCARE TR AMER or give up 0.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 67.47% |
| Values | Daily Returns |
Zhihu Inc ADR vs. HEALTHCARE TR AMER
Performance |
| Timeline |
| Zhihu Inc ADR |
| HEALTHCARE TR AMER |
Zhihu and 42225UAF1 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and 42225UAF1
The main advantage of trading using opposite Zhihu and 42225UAF1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, 42225UAF1 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 42225UAF1 will offset losses from the drop in 42225UAF1's long position.The idea behind Zhihu Inc ADR and HEALTHCARE TR AMER 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.| 42225UAF1 vs. AEP TEX INC | 42225UAF1 vs. US BANK NATIONAL | 42225UAF1 vs. Jackson Financial | 42225UAF1 vs. MetLife |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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