Correlation Between Asset Entities and Kanzhun

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

By analyzing existing cross correlation between Asset Entities Class and Kanzhun Ltd ADR, you can compare the effects of market volatilities on Asset Entities and Kanzhun 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 Asset Entities with a short position of Kanzhun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asset Entities and Kanzhun.

Diversification Opportunities for Asset Entities and Kanzhun

-0.1

Correlation Coefficient

Asset Entities  Kanzhun

Good diversification

The 3 months correlation between Asset and Kanzhun is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Asset Entities Class and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR and Asset Entities 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 Asset Entities Class are associated (or correlated) with Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of Asset Entities i.e., Asset Entities and Kanzhun go up and down completely randomly.

Pair Corralation between Asset Entities and Kanzhun

Given the investment horizon of 90 days Asset Entities Class is expected to generate 5.67 times more return on investment than Kanzhun. However, Asset Entities is 5.67 times more volatile than Kanzhun Ltd ADR. It trades about 0.07 of its potential returns per unit of risk. Kanzhun Ltd ADR is currently generating about 0.21 per unit of risk. If you would invest  47.00  in Asset Entities Class on December 27, 2024 and sell it today you would earn a total of  5.00  from holding Asset Entities Class or generate 10.64% return on investment over 90 days.

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

Asset Entities Class  vs.  Kanzhun Ltd ADR

Asset Entities Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Asset Entities Class are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Asset Entities unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kanzhun Ltd ADR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kanzhun showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Asset Entities and Kanzhun

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

The idea behind Asset Entities Class and Kanzhun Ltd ADR 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.

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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.