Correlation Between Samfine Creation and Zhihu

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

By analyzing existing cross correlation between Samfine Creation Holdings and Zhihu Inc ADR, you can compare the effects of market volatilities on Samfine Creation and Zhihu 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 Samfine Creation with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samfine Creation and Zhihu.

Diversification Opportunities for Samfine Creation and Zhihu

0.0

Correlation Coefficient

Samfine Creation  Zhihu

Pay attention - limited upside

The 3 months correlation between Samfine and Zhihu is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Samfine Creation Holdings and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR and Samfine Creation 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 Samfine Creation Holdings are associated (or correlated) with Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of Samfine Creation i.e., Samfine Creation and Zhihu go up and down completely randomly.

Pair Corralation between Samfine Creation and Zhihu

Given the investment horizon of 90 days Samfine Creation Holdings is expected to generate 2.58 times more return on investment than Zhihu. However, Samfine Creation is 2.58 times more volatile than Zhihu Inc ADR. It trades about 0.3 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.06 per unit of risk. If you would invest  530.00  in Samfine Creation Holdings on September 3, 2024 and sell it today you would earn a total of  835.00  from holding Samfine Creation Holdings or generate 157.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	53.13%
Values	Daily Returns

Samfine Creation Holdings  vs.  Zhihu Inc ADR

Samfine Creation Holdings

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Samfine Creation Holdings are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite nearly conflicting technical indicators, Samfine Creation reported solid returns over the last few months and may actually be approaching a breakup point.

Zhihu Inc ADR

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Zhihu Inc ADR are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating technical indicators, Zhihu demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Samfine Creation and Zhihu

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

The idea behind Samfine Creation Holdings and Zhihu Inc 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.