Correlation Between Sysco and Zhihu

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

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

Diversification Opportunities for Sysco and Zhihu

0.05

Correlation Coefficient

Sysco  Zhihu

Significant diversification

The 3 months correlation between Sysco and Zhihu is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sysco 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 Sysco 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 Sysco 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 Sysco i.e., Sysco and Zhihu go up and down completely randomly.

Pair Corralation between Sysco and Zhihu

Considering the 90-day investment horizon Sysco is expected to generate 0.32 times more return on investment than Zhihu. However, Sysco is 3.13 times less risky than Zhihu. It trades about -0.63 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about -0.32 per unit of risk. If you would invest  8,052  in Sysco on October 10, 2024 and sell it today you would lose (597.00) from holding Sysco or give up 7.41% of portfolio value over 90 days.

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

Sysco  vs.  Zhihu Inc ADR

Sysco

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sysco are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, Sysco is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Zhihu Inc ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhihu Inc ADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's technical indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Sysco and Zhihu

The main advantage of trading using opposite Sysco and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sysco 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 Sysco 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.