Correlation Between Bright Scholar and United Homes
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and United Homes 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 United Homes 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 United Homes Group, you can compare the effects of market volatilities on Bright Scholar and United Homes 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 United Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and United Homes.
Diversification Opportunities for Bright Scholar and United Homes
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Bright and United is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and United Homes Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Homes 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 United Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Homes Group has no effect on the direction of Bright Scholar i.e., Bright Scholar and United Homes go up and down completely randomly.
Pair Corralation between Bright Scholar and United Homes
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the United Homes. But the stock apears to be less risky and, when comparing its historical volatility, Bright Scholar Education is 2.12 times less risky than United Homes. The stock trades about -0.02 of its potential returns per unit of risk. The United Homes Group is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 63.00 in United Homes Group on September 3, 2024 and sell it today you would earn a total of 38.00 from holding United Homes Group or generate 60.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.69% |
| Values | Daily Returns |
Bright Scholar Education vs. United Homes Group
Performance |
| Timeline |
| Bright Scholar Education |
| United Homes Group |
Bright Scholar and United Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and United Homes
The main advantage of trading using opposite Bright Scholar and United Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, United Homes 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 United Homes will offset losses from the drop in United Homes' 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 |
| United Homes vs. Paiute Oil Mining | United Homes vs. Bright Scholar Education | United Homes vs. Inflection Point Acquisition | United Homes vs. TFI International |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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