Correlation Between Kanzhun and FubotvInc

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

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

Diversification Opportunities for Kanzhun and FubotvInc

-0.88

Correlation Coefficient

Kanzhun  FubotvInc

Pay attention - limited upside

The 3 months correlation between Kanzhun and FubotvInc is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Kanzhun Ltd ADR and FubotvInc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FubotvInc and Kanzhun 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 Kanzhun Ltd ADR are associated (or correlated) with FubotvInc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FubotvInc has no effect on the direction of Kanzhun i.e., Kanzhun and FubotvInc go up and down completely randomly.

Pair Corralation between Kanzhun and FubotvInc

Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to generate 0.3 times more return on investment than FubotvInc. However, Kanzhun Ltd ADR is 3.34 times less risky than FubotvInc. It trades about 0.38 of its potential returns per unit of risk. FubotvInc is currently generating about 0.05 per unit of risk. If you would invest  1,835  in Kanzhun Ltd ADR on February 14, 2024 and sell it today you would earn a total of  252.00  from holding Kanzhun Ltd ADR or generate 13.73% return on investment over 90 days.

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

Kanzhun Ltd ADR  vs.  FubotvInc

Kanzhun Ltd ADR

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Kanzhun showed solid returns over the last few months and may actually be approaching a breakup point.

FubotvInc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FubotvInc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's fundamental drivers remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kanzhun and FubotvInc

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

The idea behind Kanzhun Ltd ADR and FubotvInc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.