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
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bright and Stepstone is -0.18. 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 Education is expected to generate 2.56 times more return on investment than Stepstone. However, Bright Scholar is 2.56 times more volatile than Stepstone Group. It trades about 0.07 of its potential returns per unit of risk. Stepstone Group is currently generating about 0.16 per unit of risk. If you would invest 106.00 in Bright Scholar Education on September 14, 2024 and sell it today you would earn a total of 91.00 from holding Bright Scholar Education or generate 85.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.51% |
| 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. Laureate Education | Bright Scholar vs. American Public Education | Bright Scholar vs. Lincoln Educational Services | Bright Scholar vs. Adtalem Global Education |
| Stepstone vs. Visa Class A | Stepstone vs. Diamond Hill Investment | Stepstone vs. Distoken Acquisition | Stepstone vs. AllianceBernstein Holding LP |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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