Correlation Between Stonebridge Acquisition and CIBT Education
Can any of the company-specific risk be diversified away by investing in both Stonebridge Acquisition and CIBT 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 Stonebridge Acquisition and CIBT Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stonebridge Acquisition Corp and CIBT Education Group, you can compare the effects of market volatilities on Stonebridge Acquisition and CIBT 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 Stonebridge Acquisition with a short position of CIBT Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stonebridge Acquisition and CIBT Education.
Diversification Opportunities for Stonebridge Acquisition and CIBT Education
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Stonebridge and CIBT is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding Stonebridge Acquisition Corp and CIBT Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIBT Education Group and Stonebridge Acquisition 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 Stonebridge Acquisition Corp are associated (or correlated) with CIBT Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIBT Education Group has no effect on the direction of Stonebridge Acquisition i.e., Stonebridge Acquisition and CIBT Education go up and down completely randomly.
Pair Corralation between Stonebridge Acquisition and CIBT Education
Given the investment horizon of 90 days Stonebridge Acquisition is expected to generate 635.86 times less return on investment than CIBT Education. But when comparing it to its historical volatility, Stonebridge Acquisition Corp is 565.62 times less risky than CIBT Education. It trades about 0.19 of its potential returns per unit of risk. CIBT Education Group is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5.60 in CIBT Education Group on September 2, 2024 and sell it today you would lose (4.16) from holding CIBT Education Group or give up 74.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 34.53% |
| Values | Daily Returns |
Stonebridge Acquisition Corp vs. CIBT Education Group
Performance |
| Timeline |
| Stonebridge Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CIBT Education Group |
Stonebridge Acquisition and CIBT Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stonebridge Acquisition and CIBT Education
The main advantage of trading using opposite Stonebridge Acquisition and CIBT Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stonebridge Acquisition position performs unexpectedly, CIBT 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 CIBT Education will offset losses from the drop in CIBT Education's long position.The idea behind Stonebridge Acquisition Corp and CIBT Education Group 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.| CIBT Education vs. ATA Creativity Global | CIBT Education vs. American Public Education | CIBT Education vs. Skillful Craftsman Education | CIBT Education vs. China Liberal Education |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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