Correlation Between Perdoceo Education and Lundin Energy
Can any of the company-specific risk be diversified away by investing in both Perdoceo Education and Lundin Energy 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 Perdoceo Education and Lundin Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perdoceo Education and Lundin Energy AB, you can compare the effects of market volatilities on Perdoceo Education and Lundin Energy 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 Perdoceo Education with a short position of Lundin Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perdoceo Education and Lundin Energy.
Diversification Opportunities for Perdoceo Education and Lundin Energy
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Perdoceo and Lundin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Perdoceo Education and Lundin Energy AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Energy AB and Perdoceo 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 Perdoceo Education are associated (or correlated) with Lundin Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Energy AB has no effect on the direction of Perdoceo Education i.e., Perdoceo Education and Lundin Energy go up and down completely randomly.
Pair Corralation between Perdoceo Education and Lundin Energy
Assuming the 90 days horizon Perdoceo Education is expected to generate 0.7 times more return on investment than Lundin Energy. However, Perdoceo Education is 1.43 times less risky than Lundin Energy. It trades about 0.07 of its potential returns per unit of risk. Lundin Energy AB is currently generating about -0.03 per unit of risk. If you would invest 1,242 in Perdoceo Education on November 27, 2024 and sell it today you would earn a total of 1,318 from holding Perdoceo Education or generate 106.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perdoceo Education vs. Lundin Energy AB
Performance |
| Timeline |
| Perdoceo Education |
| Lundin Energy AB |
Perdoceo Education and Lundin Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perdoceo Education and Lundin Energy
The main advantage of trading using opposite Perdoceo Education and Lundin Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perdoceo Education position performs unexpectedly, Lundin Energy 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 Lundin Energy will offset losses from the drop in Lundin Energy's long position.| Perdoceo Education vs. MEDICAL FACILITIES NEW | Perdoceo Education vs. Heidelberg Materials AG | Perdoceo Education vs. APPLIED MATERIALS | Perdoceo Education vs. Clearside Biomedical |
| Lundin Energy vs. OFFICE DEPOT | Lundin Energy vs. PURETECH HEALTH PLC | Lundin Energy vs. CENTURIA OFFICE REIT | Lundin Energy vs. EPSILON HEALTHCARE LTD |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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