Correlation Between China Liberal and Golden Sun
Can any of the company-specific risk be diversified away by investing in both China Liberal and Golden Sun 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 Liberal and Golden Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Liberal Education and Golden Sun Education, you can compare the effects of market volatilities on China Liberal and Golden Sun 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 Liberal with a short position of Golden Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Liberal and Golden Sun.
Diversification Opportunities for China Liberal and Golden Sun
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Golden is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Liberal Education and Golden Sun Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Sun Education and China Liberal 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 Liberal Education are associated (or correlated) with Golden Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Sun Education has no effect on the direction of China Liberal i.e., China Liberal and Golden Sun go up and down completely randomly.
Pair Corralation between China Liberal and Golden Sun
Given the investment horizon of 90 days China Liberal Education is expected to under-perform the Golden Sun. But the stock apears to be less risky and, when comparing its historical volatility, China Liberal Education is 2.75 times less risky than Golden Sun. The stock trades about -0.34 of its potential returns per unit of risk. The Golden Sun Education is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 352.00 in Golden Sun Education on August 28, 2024 and sell it today you would lose (54.00) from holding Golden Sun Education or give up 15.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Liberal Education vs. Golden Sun Education
Performance |
| Timeline |
| China Liberal Education |
| Golden Sun Education |
China Liberal and Golden Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Liberal and Golden Sun
The main advantage of trading using opposite China Liberal and Golden Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Liberal position performs unexpectedly, Golden Sun 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 Golden Sun will offset losses from the drop in Golden Sun's long position.| China Liberal vs. American Public Education | China Liberal vs. Lincoln Educational Services | China Liberal vs. Adtalem Global Education |
| Golden Sun vs. Wah Fu Education | Golden Sun vs. QuantaSing Group Limited | Golden Sun vs. Genius Group | Golden Sun vs. China Liberal 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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