Correlation Between Adtalem Global and Golden Sun
Can any of the company-specific risk be diversified away by investing in both Adtalem Global and Golden Sun 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 Golden Sun 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 Golden Sun Education, you can compare the effects of market volatilities on Adtalem Global and Golden Sun 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 Golden Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adtalem Global and Golden Sun.
Diversification Opportunities for Adtalem Global and Golden Sun
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Adtalem and Golden is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Adtalem Global Education and Golden Sun Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Sun Education 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 Golden Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Sun Education has no effect on the direction of Adtalem Global i.e., Adtalem Global and Golden Sun go up and down completely randomly.
Pair Corralation between Adtalem Global and Golden Sun
Given the investment horizon of 90 days Adtalem Global is expected to generate 1.53 times less return on investment than Golden Sun. But when comparing it to its historical volatility, Adtalem Global Education is 2.3 times less risky than Golden Sun. It trades about 0.33 of its potential returns per unit of risk. Golden Sun Education is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 266.00 in Golden Sun Education on November 1, 2024 and sell it today you would earn a total of 39.00 from holding Golden Sun Education or generate 14.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adtalem Global Education vs. Golden Sun Education
Performance |
| Timeline |
| Adtalem Global Education |
| Golden Sun Education |
Adtalem Global and Golden Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adtalem Global and Golden Sun
The main advantage of trading using opposite Adtalem Global and Golden Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adtalem Global position performs unexpectedly, Golden Sun 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 Golden Sun will offset losses from the drop in Golden Sun's long position.| Adtalem Global vs. Lixiang Education Holding | Adtalem Global vs. Four Seasons Education | Adtalem Global vs. Jianzhi Education Technology | Adtalem Global vs. Elite Education Group |
| Golden Sun vs. Wah Fu Education | Golden Sun vs. QuantaSing Group Limited | Golden Sun vs. Genius Group | Golden Sun 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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