Correlation Between Sunlands Technology and Genius
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Genius 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 Sunlands Technology and Genius into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunlands Technology Group and Genius Group, you can compare the effects of market volatilities on Sunlands Technology and Genius 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 Sunlands Technology with a short position of Genius. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Genius.
Diversification Opportunities for Sunlands Technology and Genius
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sunlands and Genius is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Genius Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Group and Sunlands 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 Sunlands Technology Group are associated (or correlated) with Genius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Group has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Genius go up and down completely randomly.
Pair Corralation between Sunlands Technology and Genius
Considering the 90-day investment horizon Sunlands Technology is expected to generate 27.21 times less return on investment than Genius. But when comparing it to its historical volatility, Sunlands Technology Group is 7.45 times less risky than Genius. It trades about 0.01 of its potential returns per unit of risk. Genius Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 5,388 in Genius Group on November 1, 2024 and sell it today you would lose (5,338) from holding Genius Group or give up 99.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sunlands Technology Group vs. Genius Group
Performance |
| Timeline |
| Sunlands Technology |
| Genius Group |
Sunlands Technology and Genius Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Genius
The main advantage of trading using opposite Sunlands Technology and Genius positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Genius 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 Genius will offset losses from the drop in Genius' long position.| Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. Ihuman Inc | Sunlands Technology vs. Adtalem Global Education |
| Genius vs. Cosmos Health | Genius vs. Motorsport Gaming Us | Genius vs. AMTD Digital | Genius vs. Magic Empire Global |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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