Correlation Between Zhihu and Vantage Towers
Can any of the company-specific risk be diversified away by investing in both Zhihu and Vantage Towers 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 Vantage Towers 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 Vantage Towers AG, you can compare the effects of market volatilities on Zhihu and Vantage Towers 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 Vantage Towers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Vantage Towers.
Diversification Opportunities for Zhihu and Vantage Towers
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhihu and Vantage is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Vantage Towers AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vantage Towers AG 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 Vantage Towers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vantage Towers AG has no effect on the direction of Zhihu i.e., Zhihu and Vantage Towers go up and down completely randomly.
Pair Corralation between Zhihu and Vantage Towers
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to under-perform the Vantage Towers. In addition to that, Zhihu is 5.39 times more volatile than Vantage Towers AG. It trades about -0.03 of its total potential returns per unit of risk. Vantage Towers AG is currently generating about 0.04 per unit of volatility. If you would invest 1,754 in Vantage Towers AG on September 19, 2024 and sell it today you would earn a total of 282.00 from holding Vantage Towers AG or generate 16.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Vantage Towers AG
Performance |
| Timeline |
| Zhihu Inc ADR |
| Vantage Towers AG |
Zhihu and Vantage Towers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Vantage Towers
The main advantage of trading using opposite Zhihu and Vantage Towers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Vantage Towers 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 Vantage Towers will offset losses from the drop in Vantage Towers' long position.The idea behind Zhihu Inc ADR and Vantage Towers AG 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.| Vantage Towers vs. Asia Pptys | Vantage Towers vs. Adler Group SA | Vantage Towers vs. Ambase Corp | Vantage Towers vs. Bridgemarq Real Estate |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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