Correlation Between Bright Scholar and Safety Shot
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Safety Shot 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 Safety Shot 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 Safety Shot, you can compare the effects of market volatilities on Bright Scholar and Safety Shot 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 Safety Shot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Safety Shot.
Diversification Opportunities for Bright Scholar and Safety Shot
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bright and Safety is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Safety Shot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Shot 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 Safety Shot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Shot has no effect on the direction of Bright Scholar i.e., Bright Scholar and Safety Shot go up and down completely randomly.
Pair Corralation between Bright Scholar and Safety Shot
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the Safety Shot. But the stock apears to be less risky and, when comparing its historical volatility, Bright Scholar Education is 2.12 times less risky than Safety Shot. The stock trades about -0.19 of its potential returns per unit of risk. The Safety Shot is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 104.00 in Safety Shot on September 2, 2024 and sell it today you would lose (12.00) from holding Safety Shot or give up 11.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Scholar Education vs. Safety Shot
Performance |
| Timeline |
| Bright Scholar Education |
| Safety Shot |
Bright Scholar and Safety Shot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Safety Shot
The main advantage of trading using opposite Bright Scholar and Safety Shot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Safety Shot 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 Safety Shot will offset losses from the drop in Safety Shot's long position.| Bright Scholar vs. American Public Education | Bright Scholar vs. ATA Creativity Global | Bright Scholar vs. Cogna Educacao SA | Bright Scholar vs. Adtalem Global Education |
| Safety Shot vs. Regeneron Pharmaceuticals | Safety Shot vs. Bright Scholar Education | Safety Shot vs. Valneva SE ADR | Safety Shot vs. Mink Therapeutics |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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