Correlation Between CHINA EDUCATION and SEDANA MEDICAL
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and SEDANA MEDICAL 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 CHINA EDUCATION and SEDANA MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA EDUCATION GROUP and SEDANA MEDICAL AB, you can compare the effects of market volatilities on CHINA EDUCATION and SEDANA MEDICAL 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 CHINA EDUCATION with a short position of SEDANA MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and SEDANA MEDICAL.
Diversification Opportunities for CHINA EDUCATION and SEDANA MEDICAL
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CHINA and SEDANA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and SEDANA MEDICAL AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEDANA MEDICAL AB and CHINA EDUCATION 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 CHINA EDUCATION GROUP are associated (or correlated) with SEDANA MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEDANA MEDICAL AB has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and SEDANA MEDICAL go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and SEDANA MEDICAL
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to generate 0.99 times more return on investment than SEDANA MEDICAL. However, CHINA EDUCATION GROUP is 1.01 times less risky than SEDANA MEDICAL. It trades about 0.07 of its potential returns per unit of risk. SEDANA MEDICAL AB is currently generating about -0.01 per unit of risk. If you would invest 24.00 in CHINA EDUCATION GROUP on September 14, 2024 and sell it today you would earn a total of 21.00 from holding CHINA EDUCATION GROUP or generate 87.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. SEDANA MEDICAL AB
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| SEDANA MEDICAL AB |
CHINA EDUCATION and SEDANA MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and SEDANA MEDICAL
The main advantage of trading using opposite CHINA EDUCATION and SEDANA MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, SEDANA MEDICAL 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 SEDANA MEDICAL will offset losses from the drop in SEDANA MEDICAL's long position.| CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc | CHINA EDUCATION vs. Apple Inc |
| SEDANA MEDICAL vs. STRAYER EDUCATION | SEDANA MEDICAL vs. Strategic Education | SEDANA MEDICAL vs. American Public Education | SEDANA MEDICAL vs. G8 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
Other Complementary Tools
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |