Correlation Between Bright Scholar and Stepstone
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Stepstone 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 Stepstone 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 Stepstone Group, you can compare the effects of market volatilities on Bright Scholar and Stepstone 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 Stepstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Stepstone.
Diversification Opportunities for Bright Scholar and Stepstone
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bright and Stepstone is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Stepstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stepstone Group 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 Stepstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stepstone Group has no effect on the direction of Bright Scholar i.e., Bright Scholar and Stepstone go up and down completely randomly.
Pair Corralation between Bright Scholar and Stepstone
Given the investment horizon of 90 days Bright Scholar is expected to generate 3.79 times less return on investment than Stepstone. In addition to that, Bright Scholar is 2.24 times more volatile than Stepstone Group. It trades about 0.01 of its total potential returns per unit of risk. Stepstone Group is currently generating about 0.09 per unit of volatility. If you would invest 5,359 in Stepstone Group on November 2, 2024 and sell it today you would earn a total of 1,113 from holding Stepstone Group or generate 20.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.09% |
| Values | Daily Returns |
Bright Scholar Education vs. Stepstone Group
Performance |
| Timeline |
| Bright Scholar Education |
| Stepstone Group |
Bright Scholar and Stepstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Stepstone
The main advantage of trading using opposite Bright Scholar and Stepstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Stepstone 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 Stepstone will offset losses from the drop in Stepstone's long position.| Bright Scholar vs. Lixiang Education Holding | Bright Scholar vs. Four Seasons Education | Bright Scholar vs. Jianzhi Education Technology | Bright Scholar vs. Elite Education Group |
| Stepstone vs. Munivest Fund | Stepstone vs. Blackrock Muniyield Quality | Stepstone vs. Federated Investors B | Stepstone vs. Federated Premier Municipal |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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