Correlation Between Jianzhi Education and SAIHEAT

Can any of the company-specific risk be diversified away by investing in both Jianzhi Education and SAIHEAT 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 Jianzhi Education and SAIHEAT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jianzhi Education Technology and SAIHEAT Limited, you can compare the effects of market volatilities on Jianzhi Education and SAIHEAT 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 Jianzhi Education with a short position of SAIHEAT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jianzhi Education and SAIHEAT.

Diversification Opportunities for Jianzhi Education and SAIHEAT

0.35

Correlation Coefficient

Jianzhi Education  SAIHEAT

Weak diversification

The 3 months correlation between Jianzhi and SAIHEAT is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Jianzhi Education Technology and SAIHEAT Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAIHEAT Limited and Jianzhi Education 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 Jianzhi Education Technology are associated (or correlated) with SAIHEAT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAIHEAT Limited has no effect on the direction of Jianzhi Education i.e., Jianzhi Education and SAIHEAT go up and down completely randomly.

Pair Corralation between Jianzhi Education and SAIHEAT

Allowing for the 90-day total investment horizon Jianzhi Education Technology is expected to under-perform the SAIHEAT. But the stock apears to be less risky and, when comparing its historical volatility, Jianzhi Education Technology is 4.96 times less risky than SAIHEAT. The stock trades about -0.02 of its potential returns per unit of risk. The SAIHEAT Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5.95  in SAIHEAT Limited on September 5, 2024 and sell it today you would earn a total of  9.05  from holding SAIHEAT Limited or generate 152.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	40.8%
Values	Daily Returns

Jianzhi Education Technology  vs.  SAIHEAT Limited

Jianzhi Education

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jianzhi Education Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Jianzhi Education showed solid returns over the last few months and may actually be approaching a breakup point.

SAIHEAT Limited

Risk-Adjusted Performance

0 of 100

Solid

Over the last 90 days SAIHEAT Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly inconsistent technical indicators, SAIHEAT showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jianzhi Education and SAIHEAT

The main advantage of trading using opposite Jianzhi Education and SAIHEAT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jianzhi Education position performs unexpectedly, SAIHEAT 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 SAIHEAT will offset losses from the drop in SAIHEAT's long position.

The idea behind Jianzhi Education Technology and SAIHEAT Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.