Correlation Between Brand Engagement and New Oriental
Can any of the company-specific risk be diversified away by investing in both Brand Engagement and New Oriental 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 Brand Engagement and New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brand Engagement Network and New Oriental Education, you can compare the effects of market volatilities on Brand Engagement and New Oriental 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 Brand Engagement with a short position of New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brand Engagement and New Oriental.
Diversification Opportunities for Brand Engagement and New Oriental
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Brand and New is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Brand Engagement Network and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education and Brand Engagement 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 Brand Engagement Network are associated (or correlated) with New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Brand Engagement i.e., Brand Engagement and New Oriental go up and down completely randomly.
Pair Corralation between Brand Engagement and New Oriental
Assuming the 90 days horizon Brand Engagement Network is expected to generate 9.76 times more return on investment than New Oriental. However, Brand Engagement is 9.76 times more volatile than New Oriental Education. It trades about 0.12 of its potential returns per unit of risk. New Oriental Education is currently generating about -0.06 per unit of risk. If you would invest 4.69 in Brand Engagement Network on November 8, 2024 and sell it today you would lose (0.68) from holding Brand Engagement Network or give up 14.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.95% |
| Values | Daily Returns |
Brand Engagement Network vs. New Oriental Education
Performance |
| Timeline |
| Brand Engagement Network |
| New Oriental Education |
Brand Engagement and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brand Engagement and New Oriental
The main advantage of trading using opposite Brand Engagement and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brand Engagement position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.| Brand Engagement vs. FactSet Research Systems | Brand Engagement vs. NetSol Technologies | Brand Engagement vs. Old Republic International | Brand Engagement vs. Root Inc |
| New Oriental vs. Gaotu Techedu DRC | New Oriental vs. 17 Education Technology | New Oriental vs. Chegg Inc | New Oriental vs. Elite Education Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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