Correlation Between Vasta Platform and Jianzhi Education

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

By analyzing existing cross correlation between Vasta Platform and Jianzhi Education Technology, you can compare the effects of market volatilities on Vasta Platform and Jianzhi Education 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 Vasta Platform with a short position of Jianzhi Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vasta Platform and Jianzhi Education.

Diversification Opportunities for Vasta Platform and Jianzhi Education

0.28

Correlation Coefficient

Vasta Platform  Jianzhi Education

Modest diversification

The 3 months correlation between Vasta and Jianzhi is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Vasta Platform and Jianzhi Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jianzhi Education and Vasta Platform 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 Vasta Platform are associated (or correlated) with Jianzhi Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jianzhi Education has no effect on the direction of Vasta Platform i.e., Vasta Platform and Jianzhi Education go up and down completely randomly.

Pair Corralation between Vasta Platform and Jianzhi Education

Given the investment horizon of 90 days Vasta Platform is expected to generate 0.5 times more return on investment than Jianzhi Education. However, Vasta Platform is 2.01 times less risky than Jianzhi Education. It trades about 0.35 of its potential returns per unit of risk. Jianzhi Education Technology is currently generating about 0.01 per unit of risk. If you would invest  216.00  in Vasta Platform on December 28, 2024 and sell it today you would earn a total of  219.00  from holding Vasta Platform or generate 101.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Vasta Platform  vs.  Jianzhi Education Technology

Vasta Platform

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Vasta Platform are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Vasta Platform sustained solid returns over the last few months and may actually be approaching a breakup point.

Jianzhi Education

Risk-Adjusted Performance

Weak

Over the last 90 days Jianzhi Education Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Jianzhi Education is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Vasta Platform and Jianzhi Education

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

The idea behind Vasta Platform and Jianzhi Education Technology 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.