Correlation Between Ke Holdings and 17 Education
Can any of the company-specific risk be diversified away by investing in both Ke Holdings and 17 Education 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 Ke Holdings and 17 Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ke Holdings and 17 Education Technology, you can compare the effects of market volatilities on Ke Holdings and 17 Education 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 Ke Holdings with a short position of 17 Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and 17 Education.
Diversification Opportunities for Ke Holdings and 17 Education
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BEKE and 17 Education is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and 17 Education Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 17 Education Technology and Ke Holdings 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 Ke Holdings are associated (or correlated) with 17 Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 17 Education Technology has no effect on the direction of Ke Holdings i.e., Ke Holdings and 17 Education go up and down completely randomly.
Pair Corralation between Ke Holdings and 17 Education
Given the investment horizon of 90 days Ke Holdings is expected to under-perform the 17 Education. In addition to that, Ke Holdings is 1.08 times more volatile than 17 Education Technology. It trades about -0.19 of its total potential returns per unit of risk. 17 Education Technology is currently generating about 0.01 per unit of volatility. If you would invest 201.00 in 17 Education Technology on August 30, 2024 and sell it today you would earn a total of 0.00 from holding 17 Education Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ke Holdings vs. 17 Education Technology
Performance |
| Timeline |
| Ke Holdings |
| 17 Education Technology |
Ke Holdings and 17 Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ke Holdings and 17 Education
The main advantage of trading using opposite Ke Holdings and 17 Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings position performs unexpectedly, 17 Education 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 17 Education will offset losses from the drop in 17 Education's long position.| Ke Holdings vs. Marcus Millichap | Ke Holdings vs. Digitalbridge Group | Ke Holdings vs. Jones Lang LaSalle | Ke Holdings vs. CBRE Group Class |
| 17 Education vs. Sunlands Technology Group | 17 Education vs. Ihuman Inc | 17 Education vs. Gaotu Techedu DRC | 17 Education vs. New Oriental 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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