Correlation Between Bright Scholar and Sunlands Technology
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Sunlands Technology 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 Sunlands Technology 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 Sunlands Technology Group, you can compare the effects of market volatilities on Bright Scholar and Sunlands Technology 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 Sunlands Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Sunlands Technology.
Diversification Opportunities for Bright Scholar and Sunlands Technology
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Bright and Sunlands is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Sunlands Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunlands Technology 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 Sunlands Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunlands Technology has no effect on the direction of Bright Scholar i.e., Bright Scholar and Sunlands Technology go up and down completely randomly.
Pair Corralation between Bright Scholar and Sunlands Technology
Given the investment horizon of 90 days Bright Scholar is expected to generate 3.51 times less return on investment than Sunlands Technology. But when comparing it to its historical volatility, Bright Scholar Education is 1.26 times less risky than Sunlands Technology. It trades about 0.01 of its potential returns per unit of risk. Sunlands Technology Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 750.00 in Sunlands Technology Group on August 24, 2024 and sell it today you would lose (90.00) from holding Sunlands Technology Group or give up 12.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Bright Scholar Education vs. Sunlands Technology Group
Performance |
| Timeline |
| Bright Scholar Education |
| Sunlands Technology |
Bright Scholar and Sunlands Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Sunlands Technology
The main advantage of trading using opposite Bright Scholar and Sunlands Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Sunlands Technology 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 Sunlands Technology will offset losses from the drop in Sunlands Technology'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 |
| Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. Ihuman Inc | Sunlands Technology vs. Adtalem Global Education |
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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