Correlation Between Bright Scholar and BRC
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and BRC 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 Bright Scholar and BRC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Scholar Education and BRC Inc, you can compare the effects of market volatilities on Bright Scholar and BRC 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 Bright Scholar with a short position of BRC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and BRC.
Diversification Opportunities for Bright Scholar and BRC
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bright and BRC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and BRC Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRC Inc and Bright Scholar 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 Bright Scholar Education are associated (or correlated) with BRC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRC Inc has no effect on the direction of Bright Scholar i.e., Bright Scholar and BRC go up and down completely randomly.
Pair Corralation between Bright Scholar and BRC
Given the investment horizon of 90 days Bright Scholar is expected to generate 9.3 times less return on investment than BRC. In addition to that, Bright Scholar is 3.01 times more volatile than BRC Inc. It trades about 0.01 of its total potential returns per unit of risk. BRC Inc is currently generating about 0.15 per unit of volatility. If you would invest 297.00 in BRC Inc on October 11, 2024 and sell it today you would earn a total of 20.00 from holding BRC Inc or generate 6.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bright Scholar Education vs. BRC Inc
Performance |
| Timeline |
| Bright Scholar Education |
| BRC Inc |
Bright Scholar and BRC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and BRC
The main advantage of trading using opposite Bright Scholar and BRC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, BRC 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 BRC will offset losses from the drop in BRC's long position.| Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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