Correlation Between EverQuote and Jianpu Technology
Can any of the company-specific risk be diversified away by investing in both EverQuote 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 EverQuote and Jianpu Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EverQuote Class A and Jianpu Technology, you can compare the effects of market volatilities on EverQuote 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 EverQuote with a short position of Jianpu Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of EverQuote and Jianpu Technology.
Diversification Opportunities for EverQuote and Jianpu Technology
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EverQuote and Jianpu is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding EverQuote Class A and Jianpu Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianpu Technology and EverQuote 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 EverQuote Class A 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 EverQuote i.e., EverQuote and Jianpu Technology go up and down completely randomly.
Pair Corralation between EverQuote and Jianpu Technology
Given the investment horizon of 90 days EverQuote is expected to generate 4.72 times less return on investment than Jianpu Technology. But when comparing it to its historical volatility, EverQuote Class A is 1.27 times less risky than Jianpu Technology. It trades about 0.16 of its potential returns per unit of risk. Jianpu Technology is currently generating about 0.58 of returns per unit of risk over similar time horizon. If you would invest 72.00 in Jianpu Technology on January 17, 2024 and sell it today you would earn a total of 6.00 from holding Jianpu Technology or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 7.32% |
| Values | Daily Returns |
EverQuote Class A vs. Jianpu Technology
Performance |
| Timeline |
| EverQuote Class A |
| Jianpu Technology |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
EverQuote and Jianpu Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EverQuote and Jianpu Technology
The main advantage of trading using opposite EverQuote and Jianpu Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EverQuote 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 EverQuote Class A 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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