Correlation Between CHINA EDUCATION and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION 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 CHINA EDUCATION and STRAYER EDUCATION 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 STRAYER EDUCATION, you can compare the effects of market volatilities on CHINA EDUCATION 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 CHINA EDUCATION with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and STRAYER EDUCATION.
Diversification Opportunities for CHINA EDUCATION and STRAYER EDUCATION
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and STRAYER is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION 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 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 CHINA EDUCATION i.e., CHINA EDUCATION and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and STRAYER EDUCATION
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the STRAYER EDUCATION. In addition to that, CHINA EDUCATION is 2.2 times more volatile than STRAYER EDUCATION. It trades about -0.16 of its total potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.29 per unit of volatility. If you would invest 8,000 in STRAYER EDUCATION on August 25, 2024 and sell it today you would earn a total of 1,150 from holding STRAYER EDUCATION or generate 14.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. STRAYER EDUCATION
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| STRAYER EDUCATION |
CHINA EDUCATION and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and STRAYER EDUCATION
The main advantage of trading using opposite CHINA EDUCATION and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION 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.| CHINA EDUCATION vs. Zoom Video Communications | CHINA EDUCATION vs. AUTO TRADER ADR | CHINA EDUCATION vs. Tradeweb Markets | CHINA EDUCATION vs. MOVIE GAMES SA |
| STRAYER EDUCATION vs. REGAL ASIAN INVESTMENTS | STRAYER EDUCATION vs. AOYAMA TRADING | STRAYER EDUCATION vs. Laureate Education | STRAYER EDUCATION vs. Gladstone Investment |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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