Correlation Between Alfa Financial and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Alfa Financial 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 Alfa Financial and STRAYER EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alfa Financial Software and STRAYER EDUCATION, you can compare the effects of market volatilities on Alfa Financial 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 Alfa Financial with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alfa Financial and STRAYER EDUCATION.
Diversification Opportunities for Alfa Financial and STRAYER EDUCATION
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alfa and STRAYER is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Alfa Financial Software and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and Alfa Financial 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 Alfa Financial Software 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 Alfa Financial i.e., Alfa Financial and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Alfa Financial and STRAYER EDUCATION
Assuming the 90 days trading horizon Alfa Financial Software is expected to generate 1.11 times more return on investment than STRAYER EDUCATION. However, Alfa Financial is 1.11 times more volatile than STRAYER EDUCATION. It trades about 0.07 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.03 per unit of risk. If you would invest 141.00 in Alfa Financial Software on November 27, 2024 and sell it today you would earn a total of 139.00 from holding Alfa Financial Software or generate 98.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alfa Financial Software vs. STRAYER EDUCATION
Performance |
| Timeline |
| Alfa Financial Software |
| STRAYER EDUCATION |
Alfa Financial and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alfa Financial and STRAYER EDUCATION
The main advantage of trading using opposite Alfa Financial and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alfa Financial 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.| Alfa Financial vs. MHP Hotel AG | Alfa Financial vs. American Airlines Group | Alfa Financial vs. Sunstone Hotel Investors | Alfa Financial vs. Nok Airlines PCL |
| STRAYER EDUCATION vs. Sanyo Chemical Industries | STRAYER EDUCATION vs. AXWAY SOFTWARE EO | STRAYER EDUCATION vs. Sinopec Shanghai Petrochemical | STRAYER EDUCATION vs. Beta Systems Software |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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