Correlation Between Zhihu and Vivid Seats

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

Diversification Opportunities for Zhihu and Vivid Seats

-0.41

Correlation Coefficient

Zhihu  Vivid Seats

Very good diversification

The 3 months correlation between Zhihu and Vivid is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Zhihu Inc ADR and Vivid Seats Warrant in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vivid Seats Warrant 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 Vivid Seats. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vivid Seats Warrant has no effect on the direction of Zhihu i.e., Zhihu and Vivid Seats go up and down completely randomly.

Pair Corralation between Zhihu and Vivid Seats

Allowing for the 90-day total investment horizon Zhihu Inc ADR is expected to generate 0.26 times more return on investment than Vivid Seats. However, Zhihu Inc ADR is 3.92 times less risky than Vivid Seats. It trades about 0.02 of its potential returns per unit of risk. Vivid Seats Warrant is currently generating about -0.01 per unit of risk. If you would invest  410.00  in Zhihu Inc ADR on May 6, 2025 and sell it today you would earn a total of  6.00  from holding Zhihu Inc ADR or generate 1.46% return on investment over 90 days.

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

Zhihu Inc ADR  vs.  Vivid Seats Warrant

Zhihu Inc ADR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zhihu Inc ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Zhihu is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Vivid Seats Warrant

Risk-Adjusted Performance

Very Weak

Over the last 90 days Vivid Seats Warrant has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Zhihu and Vivid Seats

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

The idea behind Zhihu Inc ADR and Vivid Seats Warrant 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.