Correlation Between Zhibao Technology and Arthur J

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

By analyzing existing cross correlation between Zhibao Technology Class and Arthur J Gallagher, you can compare the effects of market volatilities on Zhibao Technology and Arthur J 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 Zhibao Technology with a short position of Arthur J. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zhibao Technology and Arthur J.

Diversification Opportunities for Zhibao Technology and Arthur J

-0.49

Correlation Coefficient

Zhibao Technology  Arthur J

Very good diversification

The 3 months correlation between Zhibao and Arthur is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Zhibao Technology Class and Arthur J Gallagher in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arthur J Gallagher and Zhibao Technology 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 Zhibao Technology Class are associated (or correlated) with Arthur J. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arthur J Gallagher has no effect on the direction of Zhibao Technology i.e., Zhibao Technology and Arthur J go up and down completely randomly.

Pair Corralation between Zhibao Technology and Arthur J

Given the investment horizon of 90 days Zhibao Technology Class is expected to under-perform the Arthur J. In addition to that, Zhibao Technology is 5.5 times more volatile than Arthur J Gallagher. It trades about -0.19 of its total potential returns per unit of risk. Arthur J Gallagher is currently generating about -0.16 per unit of volatility. If you would invest  29,469  in Arthur J Gallagher on September 13, 2024 and sell it today you would lose (1,350) from holding Arthur J Gallagher or give up 4.58% of portfolio value over 90 days.

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

Zhibao Technology Class  vs.  Arthur J Gallagher

Zhibao Technology Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Zhibao Technology Class has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Arthur J Gallagher

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arthur J Gallagher has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward-looking indicators, Arthur J is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Zhibao Technology and Arthur J

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

The idea behind Zhibao Technology Class and Arthur J Gallagher 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.