Correlation Between Bright Scholar and Mars Acquisition
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Mars Acquisition 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 Mars Acquisition 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 Mars Acquisition Corp, you can compare the effects of market volatilities on Bright Scholar and Mars Acquisition 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 Mars Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Mars Acquisition.
Diversification Opportunities for Bright Scholar and Mars Acquisition
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bright and Mars is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Mars Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mars Acquisition Corp 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 Mars Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mars Acquisition Corp has no effect on the direction of Bright Scholar i.e., Bright Scholar and Mars Acquisition go up and down completely randomly.
Pair Corralation between Bright Scholar and Mars Acquisition
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 6.66 times more return on investment than Mars Acquisition. However, Bright Scholar is 6.66 times more volatile than Mars Acquisition Corp. It trades about 0.06 of its potential returns per unit of risk. Mars Acquisition Corp is currently generating about 0.02 per unit of risk. If you would invest 117.00 in Bright Scholar Education on September 4, 2024 and sell it today you would earn a total of 67.00 from holding Bright Scholar Education or generate 57.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Bright Scholar Education vs. Mars Acquisition Corp
Performance |
| Timeline |
| Bright Scholar Education |
| Mars Acquisition Corp |
Bright Scholar and Mars Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Mars Acquisition
The main advantage of trading using opposite Bright Scholar and Mars Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Mars Acquisition 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 Mars Acquisition will offset losses from the drop in Mars Acquisition'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 |
| Mars Acquisition vs. Univest Pennsylvania | Mars Acquisition vs. Freedom Bank of | Mars Acquisition vs. Codexis | Mars Acquisition vs. Stepan Company |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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