Correlation Between Zhihu and ORACLE
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By analyzing existing cross correlation between Zhihu Inc ADR and ORACLE P 325, you can compare the effects of market volatilities on Zhihu and ORACLE 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 ORACLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and ORACLE.
Diversification Opportunities for Zhihu and ORACLE
Weak diversification
The 3 months correlation between Zhihu and ORACLE is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and ORACLE P 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ORACLE P 325 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 ORACLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ORACLE P 325 has no effect on the direction of Zhihu i.e., Zhihu and ORACLE go up and down completely randomly.
Pair Corralation between Zhihu and ORACLE
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the ORACLE. In addition to that, Zhihu is 2.75 times more volatile than ORACLE P 325. It trades about -0.24 of its total potential returns per unit of risk. ORACLE P 325 is currently generating about 0.05 per unit of volatility. If you would invest 9,151 in ORACLE P 325 on October 24, 2024 and sell it today you would earn a total of 57.00 from holding ORACLE P 325 or generate 0.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. ORACLE P 325
Performance |
| Timeline |
| Zhihu Inc ADR |
| ORACLE P 325 |
Zhihu and ORACLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and ORACLE
The main advantage of trading using opposite Zhihu and ORACLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, ORACLE 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 ORACLE will offset losses from the drop in ORACLE's long position.The idea behind Zhihu Inc ADR and ORACLE P 325 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.| ORACLE vs. BOS Better Online | ORACLE vs. Zhihu Inc ADR | ORACLE vs. Integral Ad Science | ORACLE vs. Arrow Electronics |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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