Correlation Between Zhihu and HEWLETT
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By analyzing existing cross correlation between Zhihu Inc ADR and HEWLETT PACKARD ENTERPRISE, you can compare the effects of market volatilities on Zhihu and HEWLETT 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 HEWLETT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and HEWLETT.
Diversification Opportunities for Zhihu and HEWLETT
Modest diversification
The 3 months correlation between Zhihu and HEWLETT is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and HEWLETT PACKARD ENTERPRISE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEWLETT PACKARD ENTE 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 HEWLETT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEWLETT PACKARD ENTE has no effect on the direction of Zhihu i.e., Zhihu and HEWLETT go up and down completely randomly.
Pair Corralation between Zhihu and HEWLETT
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the HEWLETT. In addition to that, Zhihu is 2.27 times more volatile than HEWLETT PACKARD ENTERPRISE. It trades about -0.2 of its total potential returns per unit of risk. HEWLETT PACKARD ENTERPRISE is currently generating about -0.15 per unit of volatility. If you would invest 10,876 in HEWLETT PACKARD ENTERPRISE on October 7, 2024 and sell it today you would lose (285.00) from holding HEWLETT PACKARD ENTERPRISE or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. HEWLETT PACKARD ENTERPRISE
Performance |
| Timeline |
| Zhihu Inc ADR |
| HEWLETT PACKARD ENTE |
Zhihu and HEWLETT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and HEWLETT
The main advantage of trading using opposite Zhihu and HEWLETT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, HEWLETT 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 HEWLETT will offset losses from the drop in HEWLETT's long position.The idea behind Zhihu Inc ADR and HEWLETT PACKARD ENTERPRISE 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.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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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