Correlation Between Bright Scholar and Lixiang Education
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Lixiang Education 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 Lixiang Education 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 Lixiang Education Holding, you can compare the effects of market volatilities on Bright Scholar and Lixiang Education 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 Lixiang Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Lixiang Education.
Diversification Opportunities for Bright Scholar and Lixiang Education
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bright and Lixiang is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Lixiang Education Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lixiang Education Holding 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 Lixiang Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lixiang Education Holding has no effect on the direction of Bright Scholar i.e., Bright Scholar and Lixiang Education go up and down completely randomly.
Pair Corralation between Bright Scholar and Lixiang Education
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 0.51 times more return on investment than Lixiang Education. However, Bright Scholar Education is 1.98 times less risky than Lixiang Education. It trades about 0.0 of its potential returns per unit of risk. Lixiang Education Holding is currently generating about -0.22 per unit of risk. If you would invest 186.00 in Bright Scholar Education on August 28, 2024 and sell it today you would lose (1.00) from holding Bright Scholar Education or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Bright Scholar Education vs. Lixiang Education Holding
Performance |
| Timeline |
| Bright Scholar Education |
| Lixiang Education Holding |
Bright Scholar and Lixiang Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Lixiang Education
The main advantage of trading using opposite Bright Scholar and Lixiang Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Lixiang Education 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 Lixiang Education will offset losses from the drop in Lixiang Education's long position.| Bright Scholar vs. American Public Education | Bright Scholar vs. Lincoln Educational Services | Bright Scholar vs. Adtalem Global Education |
| Lixiang Education vs. China Liberal Education | Lixiang Education vs. Four Seasons Education | Lixiang Education vs. Jianzhi Education Technology | Lixiang Education vs. Elite Education Group |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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