Correlation Between Zhihu and Uniroyal Global

Can any of the company-specific risk be diversified away by investing in both Zhihu and Uniroyal Global 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 Uniroyal Global 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 Uniroyal Global Engineered, you can compare the effects of market volatilities on Zhihu and Uniroyal Global 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 Uniroyal Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Uniroyal Global.

Diversification Opportunities for Zhihu and Uniroyal Global

0.0

Correlation Coefficient

Zhihu  Uniroyal Global

Pay attention - limited upside

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

Pair Corralation between Zhihu and Uniroyal Global

If you would invest  0.08  in Uniroyal Global Engineered on October 25, 2024 and sell it today you would earn a total of  0.00  from holding Uniroyal Global Engineered or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Zhihu Inc ADR  vs.  Uniroyal Global Engineered

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 fairly strong technical indicators, Zhihu is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Uniroyal Global Engi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uniroyal Global Engineered has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable forward indicators, Uniroyal Global is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Zhihu and Uniroyal Global

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

The idea behind Zhihu Inc ADR and Uniroyal Global Engineered 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.