Correlation Between Gray Television and Scienjoy Holding

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

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

Diversification Opportunities for Gray Television and Scienjoy Holding

-0.35

Correlation Coefficient

Gray Television  Scienjoy Holding

Very good diversification

The 3 months correlation between Gray and Scienjoy is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Gray Television 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 Gray Television 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 Gray Television 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 Gray Television i.e., Gray Television and Scienjoy Holding go up and down completely randomly.

Pair Corralation between Gray Television and Scienjoy Holding

Considering the 90-day investment horizon Gray Television is expected to under-perform the Scienjoy Holding. But the stock apears to be less risky and, when comparing its historical volatility, Gray Television is 1.34 times less risky than Scienjoy Holding. The stock trades about -0.06 of its potential returns per unit of risk. The Scienjoy Holding Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  96.00  in Scienjoy Holding Corp on September 29, 2024 and sell it today you would earn a total of  8.00  from holding Scienjoy Holding Corp or generate 8.33% return on investment over 90 days.

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

Gray Television  vs.  Scienjoy Holding Corp

Gray Television

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gray Television 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Scienjoy Holding Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Scienjoy Holding Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady forward-looking indicators, Scienjoy Holding revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gray Television and Scienjoy Holding

The main advantage of trading using opposite Gray Television and Scienjoy Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gray Television 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 Gray Television 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.