Correlation Between Bright Scholar and Evolution Mining
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Evolution Mining 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 Evolution Mining 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 Evolution Mining, you can compare the effects of market volatilities on Bright Scholar and Evolution Mining 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 Evolution Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Evolution Mining.
Diversification Opportunities for Bright Scholar and Evolution Mining
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bright and Evolution is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Evolution Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Evolution Mining 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 Evolution Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Evolution Mining has no effect on the direction of Bright Scholar i.e., Bright Scholar and Evolution Mining go up and down completely randomly.
Pair Corralation between Bright Scholar and Evolution Mining
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 1.35 times more return on investment than Evolution Mining. However, Bright Scholar is 1.35 times more volatile than Evolution Mining. It trades about 0.05 of its potential returns per unit of risk. Evolution Mining is currently generating about 0.05 per unit of risk. If you would invest 112.00 in Bright Scholar Education on August 26, 2024 and sell it today you would earn a total of 71.00 from holding Bright Scholar Education or generate 63.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 96.96% |
| Values | Daily Returns |
Bright Scholar Education vs. Evolution Mining
Performance |
| Timeline |
| Bright Scholar Education |
| Evolution Mining |
Bright Scholar and Evolution Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Evolution Mining
The main advantage of trading using opposite Bright Scholar and Evolution Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Evolution Mining 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 Evolution Mining will offset losses from the drop in Evolution Mining'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 |
| Evolution Mining vs. Aurion Resources | Evolution Mining vs. Liberty Gold Corp | Evolution Mining vs. Orezone Gold Corp | Evolution Mining vs. Radisson Mining Resources |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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