Correlation Between Jianpu Technology and LM Funding
Can any of the company-specific risk be diversified away by investing in both Jianpu Technology and LM Funding 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 Jianpu Technology and LM Funding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jianpu Technology and LM Funding America, you can compare the effects of market volatilities on Jianpu Technology and LM Funding 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 Jianpu Technology with a short position of LM Funding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jianpu Technology and LM Funding.
Diversification Opportunities for Jianpu Technology and LM Funding
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jianpu and LMFA is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jianpu Technology and LM Funding America in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LM Funding America and Jianpu 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 Jianpu Technology are associated (or correlated) with LM Funding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LM Funding America has no effect on the direction of Jianpu Technology i.e., Jianpu Technology and LM Funding go up and down completely randomly.
Pair Corralation between Jianpu Technology and LM Funding
Allowing for the 90-day total investment horizon Jianpu Technology is expected to generate 1.0 times less return on investment than LM Funding. But when comparing it to its historical volatility, Jianpu Technology is 1.28 times less risky than LM Funding. It trades about 0.03 of its potential returns per unit of risk. LM Funding America is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 416.00 in LM Funding America on August 31, 2024 and sell it today you would lose (114.00) from holding LM Funding America or give up 27.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 8.29% |
| Values | Daily Returns |
Jianpu Technology vs. LM Funding America
Performance |
| Timeline |
| Jianpu Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| LM Funding America |
Jianpu Technology and LM Funding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jianpu Technology and LM Funding
The main advantage of trading using opposite Jianpu Technology and LM Funding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jianpu Technology position performs unexpectedly, LM Funding 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 LM Funding will offset losses from the drop in LM Funding's long position.| Jianpu Technology vs. Associates First Capital | Jianpu Technology vs. Yirendai | Jianpu Technology vs. Federal Agricultural Mortgage | Jianpu Technology vs. Sentage Holdings |
| LM Funding vs. X Financial Class | LM Funding vs. Nisun International Enterprise | LM Funding vs. Sentage Holdings | LM Funding vs. Cosmos Group Holdings |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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