Correlation Between Zhihu and SUMIBK

Can any of the company-specific risk be diversified away by investing in both Zhihu and SUMIBK 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 SUMIBK 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 SUMIBK 293 17 SEP 41, you can compare the effects of market volatilities on Zhihu and SUMIBK 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 SUMIBK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and SUMIBK.

Diversification Opportunities for Zhihu and SUMIBK

0.0

Correlation Coefficient

Zhihu  SUMIBK

Pay attention - limited upside

The 3 months correlation between Zhihu and SUMIBK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and SUMIBK 293 17 SEP 41 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUMIBK 293 17 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 SUMIBK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUMIBK 293 17 has no effect on the direction of Zhihu i.e., Zhihu and SUMIBK go up and down completely randomly.

Pair Corralation between Zhihu and SUMIBK

If you would invest (100.00) in SUMIBK 293 17 SEP 41 on October 10, 2024 and sell it today you would earn a total of  100.00  from holding SUMIBK 293 17 SEP 41 or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Zhihu Inc ADR  vs.  SUMIBK 293 17 SEP 41

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.

SUMIBK 293 17

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUMIBK 293 17 SEP 41 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SUMIBK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Zhihu and SUMIBK

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

The idea behind Zhihu Inc ADR and SUMIBK 293 17 SEP 41 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.