Correlation Between Kanzhun and Bilibili

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

Diversification Opportunities for Kanzhun and Bilibili

0.88

Correlation Coefficient

Kanzhun  Bilibili

Very poor diversification

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

Pair Corralation between Kanzhun and Bilibili

Allowing for the 90-day total investment horizon Kanzhun Ltd ADR is expected to generate 0.68 times more return on investment than Bilibili. However, Kanzhun Ltd ADR is 1.46 times less risky than Bilibili. It trades about 0.12 of its potential returns per unit of risk. Bilibili is currently generating about 0.07 per unit of risk. If you would invest  1,264  in Kanzhun Ltd ADR on September 25, 2024 and sell it today you would earn a total of  110.00  from holding Kanzhun Ltd ADR or generate 8.7% return on investment over 90 days.

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

Kanzhun Ltd ADR  vs.  Bilibili

Kanzhun Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kanzhun Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Kanzhun is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Bilibili

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bilibili are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak essential indicators, Bilibili demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kanzhun and Bilibili

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

The idea behind Kanzhun Ltd ADR and Bilibili 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.