Correlation Between 36Kr Holdings and Lendway

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

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

Diversification Opportunities for 36Kr Holdings and Lendway

-0.64

Correlation Coefficient

36Kr Holdings  Lendway

Excellent diversification

The 3 months correlation between 36Kr and Lendway is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding 36Kr Holdings and Lendway in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendway and 36Kr Holdings 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 36Kr Holdings are associated (or correlated) with Lendway. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendway has no effect on the direction of 36Kr Holdings i.e., 36Kr Holdings and Lendway go up and down completely randomly.

Pair Corralation between 36Kr Holdings and Lendway

Given the investment horizon of 90 days 36Kr Holdings is expected to under-perform the Lendway. In addition to that, 36Kr Holdings is 1.44 times more volatile than Lendway. It trades about -0.06 of its total potential returns per unit of risk. Lendway is currently generating about 0.08 per unit of volatility. If you would invest  373.00  in Lendway on September 12, 2024 and sell it today you would earn a total of  75.00  from holding Lendway or generate 20.11% return on investment over 90 days.

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

36Kr Holdings  vs.  Lendway

36Kr Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days 36Kr Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with sluggish performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Lendway

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Lendway are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Lendway showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 36Kr Holdings and Lendway

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

The idea behind 36Kr Holdings and Lendway 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.