Correlation Between Bright Scholar and Service Properties
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Service Properties 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 Service Properties 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 Service Properties Trust, you can compare the effects of market volatilities on Bright Scholar and Service Properties 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 Service Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Service Properties.
Diversification Opportunities for Bright Scholar and Service Properties
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bright and Service is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Service Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Service Properties Trust 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 Service Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Service Properties Trust has no effect on the direction of Bright Scholar i.e., Bright Scholar and Service Properties go up and down completely randomly.
Pair Corralation between Bright Scholar and Service Properties
Given the investment horizon of 90 days Bright Scholar Education is expected to generate 3.45 times more return on investment than Service Properties. However, Bright Scholar is 3.45 times more volatile than Service Properties Trust. It trades about 0.16 of its potential returns per unit of risk. Service Properties Trust is currently generating about 0.2 per unit of risk. If you would invest 155.00 in Bright Scholar Education on October 25, 2024 and sell it today you would earn a total of 29.00 from holding Bright Scholar Education or generate 18.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Scholar Education vs. Service Properties Trust
Performance |
| Timeline |
| Bright Scholar Education |
| Service Properties Trust |
Bright Scholar and Service Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Service Properties
The main advantage of trading using opposite Bright Scholar and Service Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Service Properties 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 Service Properties will offset losses from the drop in Service Properties' 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 |
| Service Properties vs. Nasdaq Inc | Service Properties vs. Infosys Ltd ADR | Service Properties vs. Zhihu Inc ADR | Service Properties vs. Cheche Group Class |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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