Correlation Between Zhihu and Meiwu Technology
Can any of the company-specific risk be diversified away by investing in both Zhihu and Meiwu Technology 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 Meiwu Technology 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 Meiwu Technology Co, you can compare the effects of market volatilities on Zhihu and Meiwu Technology 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 Meiwu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Meiwu Technology.
Diversification Opportunities for Zhihu and Meiwu Technology
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Zhihu and Meiwu is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Meiwu Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meiwu Technology 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 Meiwu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meiwu Technology has no effect on the direction of Zhihu i.e., Zhihu and Meiwu Technology go up and down completely randomly.
Pair Corralation between Zhihu and Meiwu Technology
Allowing for the 90-day total investment horizon Zhihu is expected to generate 8.97 times less return on investment than Meiwu Technology. In addition to that, Zhihu is 1.24 times more volatile than Meiwu Technology Co. It trades about 0.03 of its total potential returns per unit of risk. Meiwu Technology Co is currently generating about 0.32 per unit of volatility. If you would invest 78.00 in Meiwu Technology Co on September 2, 2024 and sell it today you would earn a total of 20.00 from holding Meiwu Technology Co or generate 25.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zhihu Inc ADR vs. Meiwu Technology Co
Performance |
| Timeline |
| Zhihu Inc ADR |
| Meiwu Technology |
Zhihu and Meiwu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zhihu and Meiwu Technology
The main advantage of trading using opposite Zhihu and Meiwu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Meiwu Technology 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 Meiwu Technology will offset losses from the drop in Meiwu Technology's long position.The idea behind Zhihu Inc ADR and Meiwu Technology Co 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.| Meiwu Technology vs. BJs Wholesale Club | Meiwu Technology vs. Dollar General | Meiwu Technology vs. Grocery Outlet Holding | Meiwu Technology vs. Kroger Company |
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.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets |