Correlation Between Match and Jianpu Technology
Can any of the company-specific risk be diversified away by investing in both Match and Jianpu Technology 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 Match and Jianpu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Match Group and Jianpu Technology, you can compare the effects of market volatilities on Match and Jianpu Technology 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 Match with a short position of Jianpu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Match and Jianpu Technology.
Diversification Opportunities for Match and Jianpu Technology
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Match and Jianpu is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Match Group and Jianpu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianpu Technology and Match 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 Match Group are associated (or correlated) with Jianpu Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jianpu Technology has no effect on the direction of Match i.e., Match and Jianpu Technology go up and down completely randomly.
Pair Corralation between Match and Jianpu Technology
Given the investment horizon of 90 days Match Group is expected to under-perform the Jianpu Technology. But the stock apears to be less risky and, when comparing its historical volatility, Match Group is 2.64 times less risky than Jianpu Technology. The stock trades about -0.05 of its potential returns per unit of risk. The Jianpu Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 91.00 in Jianpu Technology on January 24, 2024 and sell it today you would lose (13.00) from holding Jianpu Technology or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 70.83% |
| Values | Daily Returns |
Match Group vs. Jianpu Technology
Performance |
| Timeline |
| Match Group |
| Jianpu Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Match and Jianpu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Match and Jianpu Technology
The main advantage of trading using opposite Match and Jianpu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Match position performs unexpectedly, Jianpu Technology 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 Jianpu Technology will offset losses from the drop in Jianpu Technology's long position.The idea behind Match Group and Jianpu 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.| Jianpu Technology vs. Yirendai | Jianpu Technology vs. Federal Agricultural Mortgage | Jianpu Technology vs. Sentage Holdings | Jianpu Technology vs. Lexinfintech Holdings |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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