Correlation Between Bright Scholar and Vestis
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and Vestis 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 Vestis 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 Vestis, you can compare the effects of market volatilities on Bright Scholar and Vestis 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 Vestis. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and Vestis.
Diversification Opportunities for Bright Scholar and Vestis
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bright and Vestis is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Vestis in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vestis 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 Vestis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vestis has no effect on the direction of Bright Scholar i.e., Bright Scholar and Vestis go up and down completely randomly.
Pair Corralation between Bright Scholar and Vestis
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the Vestis. In addition to that, Bright Scholar is 2.86 times more volatile than Vestis. It trades about -0.22 of its total potential returns per unit of risk. Vestis is currently generating about -0.57 per unit of volatility. If you would invest 1,381 in Vestis on December 4, 2024 and sell it today you would lose (196.00) from holding Vestis or give up 14.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Bright Scholar Education vs. Vestis
Performance |
| Timeline |
| Bright Scholar Education |
| Vestis |
Bright Scholar and Vestis Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Scholar and Vestis
The main advantage of trading using opposite Bright Scholar and Vestis positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, Vestis 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 Vestis will offset losses from the drop in Vestis' 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 |
| Vestis vs. Cedar Realty Trust | Vestis vs. Titan Machinery | Vestis vs. Asbury Automotive Group | Vestis vs. Yoshitsu Co Ltd |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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