Correlation Between Beijing MediaLimited and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Beijing MediaLimited and STRAYER 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 Beijing MediaLimited and STRAYER EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and STRAYER EDUCATION, you can compare the effects of market volatilities on Beijing MediaLimited and STRAYER 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 Beijing MediaLimited with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing MediaLimited and STRAYER EDUCATION.
Diversification Opportunities for Beijing MediaLimited and STRAYER EDUCATION
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Beijing and STRAYER is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and Beijing MediaLimited 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 Beijing Media are associated (or correlated) with STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Beijing MediaLimited i.e., Beijing MediaLimited and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Beijing MediaLimited and STRAYER EDUCATION
Assuming the 90 days horizon Beijing Media is expected to under-perform the STRAYER EDUCATION. In addition to that, Beijing MediaLimited is 1.69 times more volatile than STRAYER EDUCATION. It trades about -0.18 of its total potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.38 per unit of volatility. If you would invest 7,900 in STRAYER EDUCATION on September 2, 2024 and sell it today you would earn a total of 1,500 from holding STRAYER EDUCATION or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Media vs. STRAYER EDUCATION
Performance |
| Timeline |
| Beijing MediaLimited |
| STRAYER EDUCATION |
Beijing MediaLimited and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing MediaLimited and STRAYER EDUCATION
The main advantage of trading using opposite Beijing MediaLimited and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing MediaLimited position performs unexpectedly, STRAYER 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Beijing MediaLimited vs. Haverty Furniture Companies | Beijing MediaLimited vs. MI Homes | Beijing MediaLimited vs. Addus HomeCare | Beijing MediaLimited vs. MHP Hotel AG |
| STRAYER EDUCATION vs. SIVERS SEMICONDUCTORS AB | STRAYER EDUCATION vs. Darden Restaurants | STRAYER EDUCATION vs. Reliance Steel Aluminum | STRAYER EDUCATION vs. Q2M Managementberatung AG |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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