Correlation Between Zhihu and Vestis
Can any of the company-specific risk be diversified away by investing in both Zhihu and Vestis 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 Vestis 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 Vestis, you can compare the effects of market volatilities on Zhihu and Vestis 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 Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhihu and Vestis.
Diversification Opportunities for Zhihu and Vestis
Pay attention - limited upside
The 3 months correlation between Zhihu and Vestis is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Zhihu i.e., Zhihu and Vestis go up and down completely randomly.
Pair Corralation between Zhihu and Vestis
Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 0.98 times more return on investment than Vestis. However, Zhihu Inc ADR is 1.02 times less risky than Vestis. It trades about 0.05 of its potential returns per unit of risk. Vestis is currently generating about -0.04 per unit of risk. If you would invest 430.00 in Zhihu Inc ADR on December 5, 2024 and sell it today you would earn a total of 121.50 from holding Zhihu Inc ADR or generate 28.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.56% |
Values | Daily Returns |
Zhihu Inc ADR vs. Vestis
Performance |
Timeline |
Zhihu Inc ADR |
Vestis |
Zhihu and Vestis Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Zhihu and Vestis
The main advantage of trading using opposite Zhihu and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zhihu position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' long position.The idea behind Zhihu Inc ADR and Vestis 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.Vestis vs. Constellation Brands Class | Vestis vs. Summit Hotel Properties | Vestis vs. Brandywine Realty Trust | Vestis vs. Meli Hotels International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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