Correlation Between Jianpu Technology and Spark Networks

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

Diversification Opportunities for Jianpu Technology and Spark Networks

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Jianpu and Spark is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Jianpu Technology and Spark Networks SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Networks SE 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 Spark Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Networks SE has no effect on the direction of Jianpu Technology i.e., Jianpu Technology and Spark Networks go up and down completely randomly.

Pair Corralation between Jianpu Technology and Spark Networks

Allowing for the 90-day total investment horizon Jianpu Technology is expected to generate 0.41 times more return on investment than Spark Networks. However, Jianpu Technology is 2.41 times less risky than Spark Networks. It trades about 0.01 of its potential returns per unit of risk. Spark Networks SE is currently generating about -0.05 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]
DirectionMoves Together 
StrengthStrong
Accuracy85.5%
ValuesDaily Returns

Jianpu Technology  vs.  Spark Networks SE

 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 latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Spark Networks SE 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Spark Networks SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Spark Networks is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Jianpu Technology and Spark Networks Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jianpu Technology and Spark Networks

The main advantage of trading using opposite Jianpu Technology and Spark Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jianpu Technology position performs unexpectedly, Spark Networks 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 Spark Networks will offset losses from the drop in Spark Networks' long position.
The idea behind Jianpu Technology and Spark Networks SE 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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