Correlation Between ZhongAn Online and US Physical

Can any of the company-specific risk be diversified away by investing in both ZhongAn Online and US Physical 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 ZhongAn Online and US Physical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZhongAn Online P and US Physical Therapy, you can compare the effects of market volatilities on ZhongAn Online and US Physical 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 ZhongAn Online with a short position of US Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZhongAn Online and US Physical.

Diversification Opportunities for ZhongAn Online and US Physical

-0.19

Correlation Coefficient

ZhongAn Online  US Physical

Good diversification

The 3 months correlation between ZhongAn and UPH is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding ZhongAn Online P and US Physical Therapy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Physical Therapy and ZhongAn Online 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 ZhongAn Online P are associated (or correlated) with US Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Physical Therapy has no effect on the direction of ZhongAn Online i.e., ZhongAn Online and US Physical go up and down completely randomly.

Pair Corralation between ZhongAn Online and US Physical

Assuming the 90 days trading horizon ZhongAn Online P is expected to generate 2.4 times more return on investment than US Physical. However, ZhongAn Online is 2.4 times more volatile than US Physical Therapy. It trades about 0.06 of its potential returns per unit of risk. US Physical Therapy is currently generating about -0.2 per unit of risk. If you would invest  142.00  in ZhongAn Online P on December 20, 2024 and sell it today you would earn a total of  13.00  from holding ZhongAn Online P or generate 9.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ZhongAn Online P  vs.  US Physical Therapy

ZhongAn Online P

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ZhongAn Online P are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, ZhongAn Online unveiled solid returns over the last few months and may actually be approaching a breakup point.

US Physical Therapy

Risk-Adjusted Performance

Very Weak

Over the last 90 days US Physical Therapy has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with ZhongAn Online and US Physical

The main advantage of trading using opposite ZhongAn Online and US Physical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZhongAn Online position performs unexpectedly, US Physical 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 US Physical will offset losses from the drop in US Physical's long position.

The idea behind ZhongAn Online P and US Physical Therapy 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.