Correlation Between JOYY and Quadratic Deflation

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

By analyzing existing cross correlation between JOYY Inc and Quadratic Deflation ETF, you can compare the effects of market volatilities on JOYY and Quadratic Deflation 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 JOYY with a short position of Quadratic Deflation. Check out your portfolio center. Please also check ongoing floating volatility patterns of JOYY and Quadratic Deflation.

Diversification Opportunities for JOYY and Quadratic Deflation

-0.63

Correlation Coefficient

JOYY  Quadratic Deflation

Excellent diversification

The 3 months correlation between JOYY and Quadratic is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding JOYY Inc and Quadratic Deflation ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quadratic Deflation ETF and JOYY 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 JOYY Inc are associated (or correlated) with Quadratic Deflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quadratic Deflation ETF has no effect on the direction of JOYY i.e., JOYY and Quadratic Deflation go up and down completely randomly.

Pair Corralation between JOYY and Quadratic Deflation

Given the investment horizon of 90 days JOYY Inc is expected to generate 2.23 times more return on investment than Quadratic Deflation. However, JOYY is 2.23 times more volatile than Quadratic Deflation ETF. It trades about 0.2 of its potential returns per unit of risk. Quadratic Deflation ETF is currently generating about -0.03 per unit of risk. If you would invest  4,157  in JOYY Inc on May 6, 2025 and sell it today you would earn a total of  862.00  from holding JOYY Inc or generate 20.74% return on investment over 90 days.

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

JOYY Inc  vs.  Quadratic Deflation ETF

JOYY Inc

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in JOYY Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, JOYY showed solid returns over the last few months and may actually be approaching a breakup point.

Quadratic Deflation ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days Quadratic Deflation ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Quadratic Deflation is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with JOYY and Quadratic Deflation

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

The idea behind JOYY Inc and Quadratic Deflation ETF 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 Transaction History module to view history of all your transactions and understand their impact on performance.