Correlation Between QuantaSing Group and Jianzhi Education

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

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

Diversification Opportunities for QuantaSing Group and Jianzhi Education

0.58

Correlation Coefficient

QuantaSing Group  Jianzhi Education

Very weak diversification

The 3 months correlation between QuantaSing and Jianzhi is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding QuantaSing Group Limited and Jianzhi Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianzhi Education and QuantaSing Group 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 QuantaSing Group Limited are associated (or correlated) with Jianzhi Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jianzhi Education has no effect on the direction of QuantaSing Group i.e., QuantaSing Group and Jianzhi Education go up and down completely randomly.

Pair Corralation between QuantaSing Group and Jianzhi Education

Considering the 90-day investment horizon QuantaSing Group Limited is expected to under-perform the Jianzhi Education. But the stock apears to be less risky and, when comparing its historical volatility, QuantaSing Group Limited is 1.4 times less risky than Jianzhi Education. The stock trades about -0.08 of its potential returns per unit of risk. The Jianzhi Education Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  99.00  in Jianzhi Education Technology on August 31, 2024 and sell it today you would earn a total of  4.00  from holding Jianzhi Education Technology or generate 4.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

QuantaSing Group Limited  vs.  Jianzhi Education Technology

QuantaSing Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuantaSing Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, QuantaSing Group reported solid returns over the last few months and may actually be approaching a breakup point.

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.

Pair Trading with QuantaSing Group and Jianzhi Education

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

The idea behind QuantaSing Group Limited and Jianzhi Education Technology 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.