Correlation Between Bright Scholar and Blue Owl
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Blue Owl 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 Blue Owl 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 Blue Owl Capital, you can compare the effects of market volatilities on Bright Scholar and Blue Owl 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 Blue Owl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Blue Owl.
Diversification Opportunities for Bright Scholar and Blue Owl
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bright and Blue is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Blue Owl Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Owl Capital 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 Blue Owl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Owl Capital has no effect on the direction of Bright Scholar i.e., Bright Scholar and Blue Owl go up and down completely randomly.
Pair Corralation between Bright Scholar and Blue Owl
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 6.25 times more return on investment than Blue Owl. However, Bright Scholar is 6.25 times more volatile than Blue Owl Capital. It trades about 0.03 of its potential returns per unit of risk. Blue Owl Capital is currently generating about 0.1 per unit of risk. If you would invest 161.00 in Bright Scholar Education on September 4, 2024 and sell it today you would earn a total of 23.00 from holding Bright Scholar Education or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.93% |
| Values | Daily Returns |
Bright Scholar Education vs. Blue Owl Capital
Performance |
| Timeline |
| Bright Scholar Education |
| Blue Owl Capital |
Bright Scholar and Blue Owl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Blue Owl
The main advantage of trading using opposite Bright Scholar and Blue Owl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Blue Owl 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 Blue Owl will offset losses from the drop in Blue Owl'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 |
| Blue Owl vs. Compania Cervecerias Unidas | Blue Owl vs. Summa Silver Corp | Blue Owl vs. Perseus Mining Limited | Blue Owl vs. Boston Beer |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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