Correlation Between Bright Scholar and Puxin
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Puxin 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 Puxin 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 Puxin Limited, you can compare the effects of market volatilities on Bright Scholar and Puxin 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 Puxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Puxin.
Diversification Opportunities for Bright Scholar and Puxin
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bright and Puxin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Puxin Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puxin Limited 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 Puxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puxin Limited has no effect on the direction of Bright Scholar i.e., Bright Scholar and Puxin go up and down completely randomly.
Pair Corralation between Bright Scholar and Puxin
Given the investment horizon of 90 days Bright Scholar is expected to generate 64.83 times less return on investment than Puxin. But when comparing it to its historical volatility, Bright Scholar Education is 3.29 times less risky than Puxin. It trades about 0.01 of its potential returns per unit of risk. Puxin Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1.10 in Puxin Limited on August 31, 2024 and sell it today you would earn a total of 0.60 from holding Puxin Limited or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.64% |
| Values | Daily Returns |
Bright Scholar Education vs. Puxin Limited
Performance |
| Timeline |
| Bright Scholar Education |
| Puxin Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Bright Scholar and Puxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Puxin
The main advantage of trading using opposite Bright Scholar and Puxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Puxin 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 Puxin will offset losses from the drop in Puxin's long position.| Bright Scholar vs. Lincoln Educational Services | Bright Scholar vs. Aquagold International | Bright Scholar vs. Thrivent High Yield | Bright Scholar vs. Morningstar Unconstrained Allocation |
| Puxin vs. Ihuman Inc | Puxin vs. Gaotu Techedu DRC | Puxin vs. TAL Education Group | Puxin vs. 17 Education Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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