Correlation Between QuantaSing Group and Genius

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

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

Diversification Opportunities for QuantaSing Group and Genius

-0.34

Correlation Coefficient

QuantaSing Group  Genius

Very good diversification

The 3 months correlation between QuantaSing and Genius is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding QuantaSing Group Limited and Genius Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Genius Group and QuantaSing Group 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 QuantaSing Group Limited are associated (or correlated) with Genius. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Genius Group has no effect on the direction of QuantaSing Group i.e., QuantaSing Group and Genius go up and down completely randomly.

Pair Corralation between QuantaSing Group and Genius

Considering the 90-day investment horizon QuantaSing Group Limited is expected to under-perform the Genius. But the stock apears to be less risky and, when comparing its historical volatility, QuantaSing Group Limited is 2.41 times less risky than Genius. The stock trades about -0.08 of its potential returns per unit of risk. The Genius Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  63.00  in Genius Group on September 1, 2024 and sell it today you would earn a total of  11.00  from holding Genius Group or generate 17.46% return on investment over 90 days.

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

QuantaSing Group Limited  vs.  Genius Group

QuantaSing Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuantaSing Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, QuantaSing Group reported solid returns over the last few months and may actually be approaching a breakup point.

Genius Group

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genius Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Genius unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QuantaSing Group and Genius

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

The idea behind QuantaSing Group Limited and Genius Group 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.