Correlation Between CHINA EDUCATION and Strategic Education
Can any of the company-specific risk be diversified away by investing in both CHINA EDUCATION and Strategic 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 Strategic 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 Strategic Education, you can compare the effects of market volatilities on CHINA EDUCATION and Strategic 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA EDUCATION and Strategic Education.
Diversification Opportunities for CHINA EDUCATION and Strategic Education
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Strategic is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CHINA EDUCATION GROUP and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of CHINA EDUCATION i.e., CHINA EDUCATION and Strategic Education go up and down completely randomly.
Pair Corralation between CHINA EDUCATION and Strategic Education
Assuming the 90 days horizon CHINA EDUCATION GROUP is expected to under-perform the Strategic Education. In addition to that, CHINA EDUCATION is 1.33 times more volatile than Strategic Education. It trades about -0.29 of its total potential returns per unit of risk. Strategic Education is currently generating about 0.23 per unit of volatility. If you would invest 7,900 in Strategic Education on September 2, 2024 and sell it today you would earn a total of 1,450 from holding Strategic Education or generate 18.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA EDUCATION GROUP vs. Strategic Education
Performance |
| Timeline |
| CHINA EDUCATION GROUP |
| Strategic Education |
CHINA EDUCATION and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA EDUCATION and Strategic Education
The main advantage of trading using opposite CHINA EDUCATION and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA EDUCATION position performs unexpectedly, Strategic 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| CHINA EDUCATION vs. DICKS Sporting Goods | CHINA EDUCATION vs. NTG Nordic Transport | CHINA EDUCATION vs. Fukuyama Transporting Co | CHINA EDUCATION vs. Sporttotal AG |
| Strategic Education vs. Superior Plus Corp | Strategic Education vs. NMI Holdings | Strategic Education vs. Origin Agritech | Strategic Education vs. SIVERS SEMICONDUCTORS AB |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |