Correlation Between EMBARK EDUCATION and American Public
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION and American Public 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 EMBARK EDUCATION and American Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and American Public Education, you can compare the effects of market volatilities on EMBARK EDUCATION and American Public 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 EMBARK EDUCATION with a short position of American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and American Public.
Diversification Opportunities for EMBARK EDUCATION and American Public
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between EMBARK and American is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education and EMBARK EDUCATION 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 EMBARK EDUCATION LTD are associated (or correlated) with American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of EMBARK EDUCATION i.e., EMBARK EDUCATION and American Public go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and American Public
Assuming the 90 days horizon EMBARK EDUCATION is expected to generate 11.25 times less return on investment than American Public. But when comparing it to its historical volatility, EMBARK EDUCATION LTD is 5.71 times less risky than American Public. It trades about 0.22 of its potential returns per unit of risk. American Public Education is currently generating about 0.43 of returns per unit of risk over similar time horizon. If you would invest 1,360 in American Public Education on August 28, 2024 and sell it today you would earn a total of 580.00 from holding American Public Education or generate 42.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. American Public Education
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| American Public Education |
EMBARK EDUCATION and American Public Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and American Public
The main advantage of trading using opposite EMBARK EDUCATION and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.| EMBARK EDUCATION vs. Platinum Investment Management | EMBARK EDUCATION vs. Cleanaway Waste Management | EMBARK EDUCATION vs. G III APPAREL GROUP | EMBARK EDUCATION vs. American Eagle Outfitters |
| American Public vs. AIR PRODCHEMICALS | American Public vs. Sanyo Chemical Industries | American Public vs. Quaker Chemical | American Public vs. FORMPIPE SOFTWARE AB |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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