Correlation Between Zhibao Technology and EHealth

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

Diversification Opportunities for Zhibao Technology and EHealth

0.8

Correlation Coefficient

Zhibao Technology  EHealth

Very poor diversification

The 3 months correlation between Zhibao and EHealth is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Zhibao Technology Class and eHealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eHealth 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 EHealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eHealth has no effect on the direction of Zhibao Technology i.e., Zhibao Technology and EHealth go up and down completely randomly.

Pair Corralation between Zhibao Technology and EHealth

Given the investment horizon of 90 days Zhibao Technology Class is expected to generate 2.06 times more return on investment than EHealth. However, Zhibao Technology is 2.06 times more volatile than eHealth. It trades about -0.01 of its potential returns per unit of risk. eHealth is currently generating about -0.23 per unit of risk. If you would invest  155.00  in Zhibao Technology Class on February 2, 2025 and sell it today you would lose (32.00) from holding Zhibao Technology Class or give up 20.65% of portfolio value over 90 days.

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

Zhibao Technology Class  vs.  eHealth

Zhibao Technology Class

Risk-Adjusted Performance

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 very healthy basic indicators, Zhibao Technology is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

eHealth

Risk-Adjusted Performance

Very Weak

Over the last 90 days eHealth has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in June 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Zhibao Technology and EHealth

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

The idea behind Zhibao Technology Class and eHealth 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.

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.