Correlation Between Genius Sports and 36Kr Holdings

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

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

Diversification Opportunities for Genius Sports and 36Kr Holdings

0.38

Correlation Coefficient

Genius Sports  36Kr Holdings

Weak diversification

The 3 months correlation between Genius and 36Kr is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Genius Sports and 36Kr Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 36Kr Holdings and Genius Sports 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 Genius Sports are associated (or correlated) with 36Kr Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 36Kr Holdings has no effect on the direction of Genius Sports i.e., Genius Sports and 36Kr Holdings go up and down completely randomly.

Pair Corralation between Genius Sports and 36Kr Holdings

Given the investment horizon of 90 days Genius Sports is expected to under-perform the 36Kr Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Genius Sports is 1.17 times less risky than 36Kr Holdings. The stock trades about -0.13 of its potential returns per unit of risk. The 36Kr Holdings is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest  40.00  in 36Kr Holdings on January 26, 2024 and sell it today you would lose (3.21) from holding 36Kr Holdings or give up 8.03% of portfolio value over 90 days.

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

Genius Sports  vs.  36Kr Holdings

Genius Sports

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Genius Sports has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in May 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

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 unfluctuating performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Genius Sports and 36Kr Holdings

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

The idea behind Genius Sports and 36Kr Holdings 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.