Correlation Between Starbox Group and Zhihu

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

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

Diversification Opportunities for Starbox Group and Zhihu

-0.62

Correlation Coefficient

Starbox Group  Zhihu

Excellent diversification

The 3 months correlation between Starbox and Zhihu is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Starbox Group 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 Starbox Group 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 Starbox Group 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 Starbox Group i.e., Starbox Group and Zhihu go up and down completely randomly.

Pair Corralation between Starbox Group and Zhihu

Given the investment horizon of 90 days Starbox Group Holdings is expected to generate 14.88 times more return on investment than Zhihu. However, Starbox Group is 14.88 times more volatile than Zhihu Inc ADR. It trades about 0.05 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.11 per unit of risk. If you would invest  164.00  in Starbox Group Holdings on December 28, 2024 and sell it today you would lose (144.00) from holding Starbox Group Holdings or give up 87.8% of portfolio value over 90 days.

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

Starbox Group Holdings  vs.  Zhihu Inc ADR

Starbox Group Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Starbox Group Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, Starbox Group showed solid returns over the last few months and may actually be approaching a breakup point.

Zhihu Inc ADR

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Zhihu Inc ADR are ranked lower than 8 (%) 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 Starbox Group and Zhihu

The main advantage of trading using opposite Starbox Group and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starbox Group 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 Starbox Group 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.