Correlation Between Jianpu Technology and Gaia

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Can any of the company-specific risk be diversified away by investing in both Jianpu Technology and Gaia 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 Jianpu Technology and Gaia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jianpu Technology and Gaia Inc, you can compare the effects of market volatilities on Jianpu Technology and Gaia 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 Jianpu Technology with a short position of Gaia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jianpu Technology and Gaia.

Diversification Opportunities for Jianpu Technology and Gaia

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Jianpu and Gaia is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Jianpu Technology and Gaia Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaia Inc and Jianpu 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 Jianpu Technology are associated (or correlated) with Gaia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaia Inc has no effect on the direction of Jianpu Technology i.e., Jianpu Technology and Gaia go up and down completely randomly.

Pair Corralation between Jianpu Technology and Gaia

Allowing for the 90-day total investment horizon Jianpu Technology is expected to generate 1.21 times more return on investment than Gaia. However, Jianpu Technology is 1.21 times more volatile than Gaia Inc. It trades about 0.01 of its potential returns per unit of risk. Gaia Inc is currently generating about -0.01 per unit of risk. If you would invest  109.00  in Jianpu Technology on December 29, 2023 and sell it today you would lose (31.00) from holding Jianpu Technology or give up 28.44% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy94.75%
ValuesDaily Returns

Jianpu Technology  vs.  Gaia Inc

 Performance 
       Timeline  
Jianpu Technology 

Risk-Adjusted Performance

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Over the last 90 days Jianpu Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Jianpu Technology is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.
Gaia Inc 

Risk-Adjusted Performance

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OK
Compared to the overall equity markets, risk-adjusted returns on investments in Gaia Inc are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak forward indicators, Gaia sustained solid returns over the last few months and may actually be approaching a breakup point.

Jianpu Technology and Gaia Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jianpu Technology and Gaia

The main advantage of trading using opposite Jianpu Technology and Gaia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jianpu Technology position performs unexpectedly, Gaia 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 Gaia will offset losses from the drop in Gaia's long position.
The idea behind Jianpu Technology and Gaia Inc 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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