Correlation Between Kanzhun and Zillow

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

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

Diversification Opportunities for Kanzhun and Zillow

-0.29

Correlation Coefficient

Kanzhun  Zillow

Very good diversification

The 3 months correlation between Kanzhun and Zillow is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and Zillow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zillow Group and Kanzhun 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 Kanzhun Ltd ADR are associated (or correlated) with Zillow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zillow Group has no effect on the direction of Kanzhun i.e., Kanzhun and Zillow go up and down completely randomly.

Pair Corralation between Kanzhun and Zillow

Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to under-perform the Zillow. In addition to that, Kanzhun is 2.27 times more volatile than Zillow Group. It trades about -0.01 of its total potential returns per unit of risk. Zillow Group is currently generating about 0.2 per unit of volatility. If you would invest  7,320  in Zillow Group on September 12, 2024 and sell it today you would earn a total of  559.00  from holding Zillow Group or generate 7.64% return on investment over 90 days.

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

Kanzhun Ltd ADR  vs.  Zillow Group

Kanzhun Ltd ADR

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 5 (%) 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.

Zillow Group

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zillow Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Zillow reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kanzhun and Zillow

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

The idea behind Kanzhun Ltd ADR and Zillow Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.