Correlation Between Adtalem Global and ATA Creativity
Can any of the company-specific risk be diversified away by investing in both Adtalem Global and ATA Creativity 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 Adtalem Global and ATA Creativity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adtalem Global Education and ATA Creativity Global, you can compare the effects of market volatilities on Adtalem Global and ATA Creativity 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 Adtalem Global with a short position of ATA Creativity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adtalem Global and ATA Creativity.
Diversification Opportunities for Adtalem Global and ATA Creativity
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adtalem and ATA is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Adtalem Global Education and ATA Creativity Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATA Creativity Global and Adtalem Global 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 Adtalem Global Education are associated (or correlated) with ATA Creativity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATA Creativity Global has no effect on the direction of Adtalem Global i.e., Adtalem Global and ATA Creativity go up and down completely randomly.
Pair Corralation between Adtalem Global and ATA Creativity
Given the investment horizon of 90 days Adtalem Global Education is expected to generate 1.38 times more return on investment than ATA Creativity. However, Adtalem Global is 1.38 times more volatile than ATA Creativity Global. It trades about 0.27 of its potential returns per unit of risk. ATA Creativity Global is currently generating about 0.03 per unit of risk. If you would invest 7,344 in Adtalem Global Education on August 24, 2024 and sell it today you would earn a total of 1,538 from holding Adtalem Global Education or generate 20.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adtalem Global Education vs. ATA Creativity Global
Performance |
| Timeline |
| Adtalem Global Education |
| ATA Creativity Global |
Adtalem Global and ATA Creativity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adtalem Global and ATA Creativity
The main advantage of trading using opposite Adtalem Global and ATA Creativity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adtalem Global position performs unexpectedly, ATA Creativity 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 ATA Creativity will offset losses from the drop in ATA Creativity's long position.| Adtalem Global vs. Grand Canyon Education | Adtalem Global vs. Afya | Adtalem Global vs. Bright Scholar Education | Adtalem Global vs. Laureate Education |
| ATA Creativity vs. Universal Technical Institute | ATA Creativity vs. Cogna Educacao SA | ATA Creativity vs. Sunlands Technology Group | ATA Creativity vs. American Public 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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