Correlation Between Eventbrite and Kanzhun

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Can any of the company-specific risk be diversified away by investing in both Eventbrite and Kanzhun 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 Eventbrite and Kanzhun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eventbrite Class A and Kanzhun Ltd ADR, you can compare the effects of market volatilities on Eventbrite and Kanzhun 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 Eventbrite with a short position of Kanzhun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eventbrite and Kanzhun.

Diversification Opportunities for Eventbrite and Kanzhun

-0.83
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Eventbrite and Kanzhun is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Eventbrite Class A and Kanzhun Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kanzhun Ltd ADR and Eventbrite 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 Eventbrite Class A are associated (or correlated) with Kanzhun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kanzhun Ltd ADR has no effect on the direction of Eventbrite i.e., Eventbrite and Kanzhun go up and down completely randomly.

Pair Corralation between Eventbrite and Kanzhun

Allowing for the 90-day total investment horizon Eventbrite is expected to generate 4.02 times less return on investment than Kanzhun. But when comparing it to its historical volatility, Eventbrite Class A is 1.09 times less risky than Kanzhun. It trades about 0.01 of its potential returns per unit of risk. Kanzhun Ltd ADR is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,554  in Kanzhun Ltd ADR on February 1, 2024 and sell it today you would earn a total of  425.00  from holding Kanzhun Ltd ADR or generate 27.35% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Eventbrite Class A  vs.  Kanzhun Ltd ADR

 Performance 
       Timeline  
Eventbrite Class A 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Eventbrite Class A 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 fundamental drivers remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
Kanzhun Ltd ADR 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Kanzhun Ltd ADR are ranked lower than 12 (%) 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.

Eventbrite and Kanzhun Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Eventbrite and Kanzhun

The main advantage of trading using opposite Eventbrite and Kanzhun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventbrite position performs unexpectedly, Kanzhun 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 Kanzhun will offset losses from the drop in Kanzhun's long position.
The idea behind Eventbrite Class A and Kanzhun Ltd ADR 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.

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