Correlation Between Trump Media and 36Kr Holdings

Can any of the company-specific risk be diversified away by investing in both Trump Media and 36Kr Holdings 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 Trump Media and 36Kr Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trump Media Technology and 36Kr Holdings, you can compare the effects of market volatilities on Trump Media and 36Kr Holdings 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 Trump Media with a short position of 36Kr Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trump Media and 36Kr Holdings.

Diversification Opportunities for Trump Media and 36Kr Holdings

-0.49

Correlation Coefficient

Trump Media  36Kr Holdings

Very good diversification

The 3 months correlation between Trump and 36Kr is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Trump Media Technology and 36Kr Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 36Kr Holdings and Trump Media 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 Trump Media Technology are associated (or correlated) with 36Kr Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 36Kr Holdings has no effect on the direction of Trump Media i.e., Trump Media and 36Kr Holdings go up and down completely randomly.

Pair Corralation between Trump Media and 36Kr Holdings

Assuming the 90 days horizon Trump Media Technology is expected to under-perform the 36Kr Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Trump Media Technology is 3.17 times less risky than 36Kr Holdings. The stock trades about -0.01 of its potential returns per unit of risk. The 36Kr Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  297.00  in 36Kr Holdings on December 28, 2024 and sell it today you would earn a total of  101.00  from holding 36Kr Holdings or generate 34.01% return on investment over 90 days.

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

Trump Media Technology  vs.  36Kr Holdings

Trump Media Technology

Risk-Adjusted Performance

Very Weak

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

36Kr Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 36Kr Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively sluggish forward-looking signals, 36Kr Holdings reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Trump Media and 36Kr Holdings

The main advantage of trading using opposite Trump Media and 36Kr Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trump Media position performs unexpectedly, 36Kr Holdings 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 36Kr Holdings will offset losses from the drop in 36Kr Holdings' long position.

The idea behind Trump Media Technology and 36Kr Holdings 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.