Correlation Between Sunlands Technology and Zhangmen Education
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Zhangmen Education 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 Zhangmen Education 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 Zhangmen Education, you can compare the effects of market volatilities on Sunlands Technology and Zhangmen Education 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 Zhangmen Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Zhangmen Education.
Diversification Opportunities for Sunlands Technology and Zhangmen Education
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunlands and Zhangmen is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Zhangmen Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhangmen Education 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 Zhangmen Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhangmen Education has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Zhangmen Education go up and down completely randomly.
Pair Corralation between Sunlands Technology and Zhangmen Education
If you would invest 971.00 in Sunlands Technology Group on November 1, 2024 and sell it today you would lose (294.18) from holding Sunlands Technology Group or give up 30.3% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 0.21% |
| Values | Daily Returns |
Sunlands Technology Group vs. Zhangmen Education
Performance |
| Timeline |
| Sunlands Technology |
| Zhangmen Education |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sunlands Technology and Zhangmen Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Zhangmen Education
The main advantage of trading using opposite Sunlands Technology and Zhangmen Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Zhangmen Education 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 Zhangmen Education will offset losses from the drop in Zhangmen Education'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 |
| Zhangmen Education vs. Quality Online Education | Zhangmen Education vs. Ihuman Inc | Zhangmen Education vs. Exceed World | Zhangmen Education vs. Sunlands Technology Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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