Correlation Between 49327M3H5 and Zhihu

Can any of the company-specific risk be diversified away by investing in both 49327M3H5 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 49327M3H5 and Zhihu into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between KEY 5 26 JAN 33 and Zhihu Inc ADR, you can compare the effects of market volatilities on 49327M3H5 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 49327M3H5 with a short position of Zhihu. Check out your portfolio center. Please also check ongoing floating volatility patterns of 49327M3H5 and Zhihu.

Diversification Opportunities for 49327M3H5 and Zhihu

0.35

Correlation Coefficient

49327M3H5  Zhihu

Weak diversification

The 3 months correlation between 49327M3H5 and Zhihu is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding KEY 5 26 JAN 33 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 49327M3H5 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 KEY 5 26 JAN 33 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 49327M3H5 i.e., 49327M3H5 and Zhihu go up and down completely randomly.

Pair Corralation between 49327M3H5 and Zhihu

Assuming the 90 days trading horizon 49327M3H5 is expected to generate 3.39 times less return on investment than Zhihu. But when comparing it to its historical volatility, KEY 5 26 JAN 33 is 2.34 times less risky than Zhihu. It trades about 0.02 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  351.00  in Zhihu Inc ADR on October 7, 2024 and sell it today you would earn a total of  6.00  from holding Zhihu Inc ADR or generate 1.71% return on investment over 90 days.

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

KEY 5 26 JAN 33  vs.  Zhihu Inc ADR

49327M3H5

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KEY 5 26 JAN 33 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 49327M3H5 is not utilizing all of its potentials. The recent 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 unfluctuating performance in the last few months, the Stock's technical indicators remain fairly strong which may send shares a bit higher in February 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with 49327M3H5 and Zhihu

The main advantage of trading using opposite 49327M3H5 and Zhihu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 49327M3H5 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 KEY 5 26 JAN 33 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.