Correlation Between QuantaSing Group and Sunlands Technology

Can any of the company-specific risk be diversified away by investing in both QuantaSing Group and Sunlands Technology 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 Sunlands Technology 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 Sunlands Technology Group, you can compare the effects of market volatilities on QuantaSing Group and Sunlands Technology 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 Sunlands Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of QuantaSing Group and Sunlands Technology.

Diversification Opportunities for QuantaSing Group and Sunlands Technology

0.47

Correlation Coefficient

QuantaSing Group  Sunlands Technology

Very weak diversification

The 3 months correlation between QuantaSing and Sunlands is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding QuantaSing Group Limited and Sunlands Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunlands Technology 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 Sunlands Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunlands Technology has no effect on the direction of QuantaSing Group i.e., QuantaSing Group and Sunlands Technology go up and down completely randomly.

Pair Corralation between QuantaSing Group and Sunlands Technology

Considering the 90-day investment horizon QuantaSing Group Limited is expected to under-perform the Sunlands Technology. In addition to that, QuantaSing Group is 1.64 times more volatile than Sunlands Technology Group. It trades about -0.22 of its total potential returns per unit of risk. Sunlands Technology Group is currently generating about -0.03 per unit of volatility. If you would invest  651.00  in Sunlands Technology Group on September 23, 2024 and sell it today you would lose (27.00) from holding Sunlands Technology Group or give up 4.15% of portfolio value over 90 days.

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

QuantaSing Group Limited  vs.  Sunlands Technology Group

QuantaSing Group

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in QuantaSing Group Limited are ranked lower than 5 (%) 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.

Sunlands Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunlands Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Sunlands Technology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with QuantaSing Group and Sunlands Technology

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

The idea behind QuantaSing Group Limited and Sunlands Technology 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.