Correlation Between Bright Scholar and Cannae Holdings
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Cannae Holdings 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 Cannae Holdings 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 Cannae Holdings, you can compare the effects of market volatilities on Bright Scholar and Cannae Holdings 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 Cannae Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Cannae Holdings.
Diversification Opportunities for Bright Scholar and Cannae Holdings
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bright and Cannae is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae Holdings 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 Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of Bright Scholar i.e., Bright Scholar and Cannae Holdings go up and down completely randomly.
Pair Corralation between Bright Scholar and Cannae Holdings
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the Cannae Holdings. In addition to that, Bright Scholar is 2.86 times more volatile than Cannae Holdings. It trades about -0.02 of its total potential returns per unit of risk. Cannae Holdings is currently generating about 0.1 per unit of volatility. If you would invest 1,784 in Cannae Holdings on September 1, 2024 and sell it today you would earn a total of 386.00 from holding Cannae Holdings or generate 21.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Bright Scholar Education vs. Cannae Holdings
Performance |
| Timeline |
| Bright Scholar Education |
| Cannae Holdings |
Bright Scholar and Cannae Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Cannae Holdings
The main advantage of trading using opposite Bright Scholar and Cannae Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Cannae Holdings 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 Cannae Holdings will offset losses from the drop in Cannae Holdings' long position.| Bright Scholar vs. American Public Education | Bright Scholar vs. ATA Creativity Global | Bright Scholar vs. Cogna Educacao SA | Bright Scholar vs. Adtalem Global Education |
| Cannae Holdings vs. Brightsphere Investment Group | Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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