Correlation Between Zhihu and Starbox Group

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

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

Diversification Opportunities for Zhihu and Starbox Group

-0.62

Correlation Coefficient

Zhihu  Starbox Group

Excellent diversification

The 3 months correlation between Zhihu and Starbox is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Starbox Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbox Group Holdings and Zhihu 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 Zhihu Inc ADR are associated (or correlated) with Starbox Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbox Group Holdings has no effect on the direction of Zhihu i.e., Zhihu and Starbox Group go up and down completely randomly.

Pair Corralation between Zhihu and Starbox Group

Allowing for the 90-day total investment horizon Zhihu is expected to generate 6.4 times less return on investment than Starbox Group. But when comparing it to its historical volatility, Zhihu Inc ADR is 14.88 times less risky than Starbox Group. It trades about 0.11 of its potential returns per unit of risk. Starbox Group Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. 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

Zhihu Inc ADR  vs.  Starbox Group Holdings

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.

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.

Pair Trading with Zhihu and Starbox Group

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

The idea behind Zhihu Inc ADR and Starbox Group Holdings 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.