Correlation Between American Public and FAIR ISAAC
Can any of the company-specific risk be diversified away by investing in both American Public and FAIR ISAAC 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 American Public and FAIR ISAAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Public Education and FAIR ISAAC, you can compare the effects of market volatilities on American Public and FAIR ISAAC 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 American Public with a short position of FAIR ISAAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and FAIR ISAAC.
Diversification Opportunities for American Public and FAIR ISAAC
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and FAIR is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education and FAIR ISAAC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAIR ISAAC and American Public 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 American Public Education are associated (or correlated) with FAIR ISAAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAIR ISAAC has no effect on the direction of American Public i.e., American Public and FAIR ISAAC go up and down completely randomly.
Pair Corralation between American Public and FAIR ISAAC
Assuming the 90 days horizon American Public is expected to generate 1.02 times less return on investment than FAIR ISAAC. In addition to that, American Public is 2.63 times more volatile than FAIR ISAAC. It trades about 0.05 of its total potential returns per unit of risk. FAIR ISAAC is currently generating about 0.13 per unit of volatility. If you would invest 58,500 in FAIR ISAAC on October 16, 2024 and sell it today you would earn a total of 128,150 from holding FAIR ISAAC or generate 219.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. FAIR ISAAC
Performance |
| Timeline |
| American Public Education |
| FAIR ISAAC |
American Public and FAIR ISAAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and FAIR ISAAC
The main advantage of trading using opposite American Public and FAIR ISAAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public position performs unexpectedly, FAIR ISAAC 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 FAIR ISAAC will offset losses from the drop in FAIR ISAAC's long position.| American Public vs. VIVA WINE GROUP | American Public vs. US Physical Therapy | American Public vs. TOREX SEMICONDUCTOR LTD | American Public vs. Molina Healthcare |
| FAIR ISAAC vs. Perdoceo Education | FAIR ISAAC vs. American Public Education | FAIR ISAAC vs. CHINA EDUCATION GROUP | FAIR ISAAC vs. CHINA TONTINE WINES |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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