Correlation Between American Public and CIBT Education
Can any of the company-specific risk be diversified away by investing in both American Public 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 American Public and CIBT Education 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 CIBT Education Group, you can compare the effects of market volatilities on American Public 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 American Public with a short position of CIBT Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Public and CIBT Education.
Diversification Opportunities for American Public and CIBT Education
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between American and CIBT is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding American Public Education 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 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 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 American Public i.e., American Public and CIBT Education go up and down completely randomly.
Pair Corralation between American Public and CIBT Education
Given the investment horizon of 90 days American Public Education is expected to generate 0.23 times more return on investment than CIBT Education. However, American Public Education is 4.26 times less risky than CIBT Education. It trades about 0.38 of its potential returns per unit of risk. CIBT Education Group is currently generating about -0.11 per unit of risk. If you would invest 1,513 in American Public Education on September 2, 2024 and sell it today you would earn a total of 549.00 from holding American Public Education or generate 36.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Public Education vs. CIBT Education Group
Performance |
| Timeline |
| American Public Education |
| CIBT Education Group |
American Public and CIBT Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Public and CIBT Education
The main advantage of trading using opposite American Public and CIBT Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Public 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.| American Public vs. Laureate Education | American Public vs. Afya | American Public vs. Strategic Education | American Public vs. Stride Inc |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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