Correlation Between Bright Scholar and Ihuman
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Ihuman 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 Ihuman 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 Ihuman Inc, you can compare the effects of market volatilities on Bright Scholar and Ihuman 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 Ihuman. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Ihuman.
Diversification Opportunities for Bright Scholar and Ihuman
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bright and Ihuman is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Bright Scholar i.e., Bright Scholar and Ihuman go up and down completely randomly.
Pair Corralation between Bright Scholar and Ihuman
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 2.24 times more return on investment than Ihuman. However, Bright Scholar is 2.24 times more volatile than Ihuman Inc. It trades about 0.05 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.01 per unit of risk. If you would invest 172.00 in Bright Scholar Education on November 1, 2024 and sell it today you would earn a total of 3.00 from holding Bright Scholar Education or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Bright Scholar Education vs. Ihuman Inc
Performance |
| Timeline |
| Bright Scholar Education |
| Ihuman Inc |
Bright Scholar and Ihuman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Ihuman
The main advantage of trading using opposite Bright Scholar and Ihuman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Ihuman 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 Ihuman will offset losses from the drop in Ihuman'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 |
| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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