Correlation Between Color Star and Scienjoy Holding

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

By analyzing existing cross correlation between Color Star Technology and Scienjoy Holding Corp, you can compare the effects of market volatilities on Color Star and Scienjoy Holding 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 Color Star with a short position of Scienjoy Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Color Star and Scienjoy Holding.

Diversification Opportunities for Color Star and Scienjoy Holding

0.32

Correlation Coefficient

Color Star  Scienjoy Holding

Weak diversification

The 3 months correlation between Color and Scienjoy is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Color Star Technology and Scienjoy Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scienjoy Holding Corp and Color Star 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 Color Star Technology are associated (or correlated) with Scienjoy Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scienjoy Holding Corp has no effect on the direction of Color Star i.e., Color Star and Scienjoy Holding go up and down completely randomly.

Pair Corralation between Color Star and Scienjoy Holding

Considering the 90-day investment horizon Color Star Technology is expected to under-perform the Scienjoy Holding. In addition to that, Color Star is 1.03 times more volatile than Scienjoy Holding Corp. It trades about -0.24 of its total potential returns per unit of risk. Scienjoy Holding Corp is currently generating about 0.0 per unit of volatility. If you would invest  100.00  in Scienjoy Holding Corp on December 28, 2024 and sell it today you would lose (8.00) from holding Scienjoy Holding Corp or give up 8.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Color Star Technology  vs.  Scienjoy Holding Corp

Color Star Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Color Star Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Scienjoy Holding Corp

Risk-Adjusted Performance

Weak

Over the last 90 days Scienjoy Holding Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady forward-looking indicators, Scienjoy Holding is not utilizing all of its potentials. The current stock price chaos, may contribute to medium-term losses for the stakeholders.

Pair Trading with Color Star and Scienjoy Holding

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

The idea behind Color Star Technology and Scienjoy Holding Corp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.