Correlation Between INTER CARS and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both INTER CARS and STRAYER 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 INTER CARS and STRAYER EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTER CARS SA and STRAYER EDUCATION, you can compare the effects of market volatilities on INTER CARS and STRAYER 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 INTER CARS with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTER CARS and STRAYER EDUCATION.
Diversification Opportunities for INTER CARS and STRAYER EDUCATION
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTER and STRAYER is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding INTER CARS SA and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and INTER CARS 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 INTER CARS SA are associated (or correlated) with STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of INTER CARS i.e., INTER CARS and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between INTER CARS and STRAYER EDUCATION
Assuming the 90 days horizon INTER CARS SA is expected to generate 1.59 times more return on investment than STRAYER EDUCATION. However, INTER CARS is 1.59 times more volatile than STRAYER EDUCATION. It trades about 0.27 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.16 per unit of risk. If you would invest 11,880 in INTER CARS SA on November 2, 2024 and sell it today you would earn a total of 1,280 from holding INTER CARS SA or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTER CARS SA vs. STRAYER EDUCATION
Performance |
| Timeline |
| INTER CARS SA |
| STRAYER EDUCATION |
INTER CARS and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTER CARS and STRAYER EDUCATION
The main advantage of trading using opposite INTER CARS and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTER CARS position performs unexpectedly, STRAYER 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| INTER CARS vs. Cardinal Health | INTER CARS vs. National Health Investors | INTER CARS vs. Chunghwa Telecom Co | INTER CARS vs. HEALTHSTREAM |
| STRAYER EDUCATION vs. CSSC Offshore Marine | STRAYER EDUCATION vs. AIR PRODCHEMICALS | STRAYER EDUCATION vs. SOLSTAD OFFSHORE NK | STRAYER EDUCATION vs. BW OFFSHORE LTD |
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 Stocks Directory module to find actively traded stocks across global markets.
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