Correlation Between Zhihu and REPUBLIC
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By analyzing existing cross correlation between Zhihu Inc ADR and REPUBLIC SVCS INC, you can compare the effects of market volatilities on Zhihu and REPUBLIC 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 REPUBLIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and REPUBLIC.
Diversification Opportunities for Zhihu and REPUBLIC
Excellent diversification
The 3 months correlation between Zhihu and REPUBLIC is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and REPUBLIC SVCS INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REPUBLIC SVCS INC 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 REPUBLIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REPUBLIC SVCS INC has no effect on the direction of Zhihu i.e., Zhihu and REPUBLIC go up and down completely randomly.
Pair Corralation between Zhihu and REPUBLIC
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 19.99 times more return on investment than REPUBLIC. However, Zhihu is 19.99 times more volatile than REPUBLIC SVCS INC. It trades about 0.01 of its potential returns per unit of risk. REPUBLIC SVCS INC is currently generating about 0.09 per unit of risk. If you would invest 345.00 in Zhihu Inc ADR on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Zhihu Inc ADR or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. REPUBLIC SVCS INC
Performance |
| Timeline |
| Zhihu Inc ADR |
| REPUBLIC SVCS INC |
Zhihu and REPUBLIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and REPUBLIC
The main advantage of trading using opposite Zhihu and REPUBLIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, REPUBLIC 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 REPUBLIC will offset losses from the drop in REPUBLIC's long position.The idea behind Zhihu Inc ADR and REPUBLIC SVCS INC 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.| REPUBLIC vs. WK Kellogg Co | REPUBLIC vs. Merit Medical Systems | REPUBLIC vs. SNDL Inc | REPUBLIC vs. Cytek Biosciences |
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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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