Correlation Between Sunlands Technology and JIADE LIMITED
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and JIADE LIMITED 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 JIADE LIMITED 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 JIADE LIMITED Common, you can compare the effects of market volatilities on Sunlands Technology and JIADE LIMITED 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 JIADE LIMITED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and JIADE LIMITED.
Diversification Opportunities for Sunlands Technology and JIADE LIMITED
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunlands and JIADE is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and JIADE LIMITED Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JIADE LIMITED Common 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 JIADE LIMITED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JIADE LIMITED Common has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and JIADE LIMITED go up and down completely randomly.
Pair Corralation between Sunlands Technology and JIADE LIMITED
Considering the 90-day investment horizon Sunlands Technology is expected to generate 2.82 times less return on investment than JIADE LIMITED. But when comparing it to its historical volatility, Sunlands Technology Group is 2.9 times less risky than JIADE LIMITED. It trades about 0.03 of its potential returns per unit of risk. JIADE LIMITED Common is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 407.00 in JIADE LIMITED Common on September 12, 2024 and sell it today you would lose (343.50) from holding JIADE LIMITED Common or give up 84.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 44.24% |
| Values | Daily Returns |
Sunlands Technology Group vs. JIADE LIMITED Common
Performance |
| Timeline |
| Sunlands Technology |
| JIADE LIMITED Common |
Sunlands Technology and JIADE LIMITED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and JIADE LIMITED
The main advantage of trading using opposite Sunlands Technology and JIADE LIMITED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, JIADE LIMITED 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 JIADE LIMITED will offset losses from the drop in JIADE LIMITED's long position.| Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. Ihuman Inc | Sunlands Technology vs. Adtalem Global Education |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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