Correlation Between Sunlands Technology and RENN Fund
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and RENN Fund 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 RENN Fund 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 RENN Fund, you can compare the effects of market volatilities on Sunlands Technology and RENN Fund 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 RENN Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and RENN Fund.
Diversification Opportunities for Sunlands Technology and RENN Fund
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunlands and RENN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and RENN Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RENN Fund 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 RENN Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RENN Fund has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and RENN Fund go up and down completely randomly.
Pair Corralation between Sunlands Technology and RENN Fund
Considering the 90-day investment horizon Sunlands Technology is expected to generate 1.6 times less return on investment than RENN Fund. In addition to that, Sunlands Technology is 3.08 times more volatile than RENN Fund. It trades about 0.04 of its total potential returns per unit of risk. RENN Fund is currently generating about 0.18 per unit of volatility. If you would invest 162.00 in RENN Fund on September 1, 2024 and sell it today you would earn a total of 115.00 from holding RENN Fund or generate 70.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunlands Technology Group vs. RENN Fund
Performance |
| Timeline |
| Sunlands Technology |
| RENN Fund |
Sunlands Technology and RENN Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and RENN Fund
The main advantage of trading using opposite Sunlands Technology and RENN Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, RENN Fund 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 RENN Fund will offset losses from the drop in RENN Fund's long position.| Sunlands Technology vs. American Public Education | Sunlands Technology vs. ATA Creativity Global | Sunlands Technology vs. Cogna Educacao SA | Sunlands Technology vs. Adtalem Global Education |
| RENN Fund vs. Ellsworth Convertible Growth | RENN Fund vs. Delaware Investments Florida | RENN Fund vs. Nuveen New Jersey | RENN Fund vs. John Hancock Hedged |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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