Correlation Between China Liberal and Vasta Platform
Can any of the company-specific risk be diversified away by investing in both China Liberal and Vasta Platform 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 Vasta Platform 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 Vasta Platform, you can compare the effects of market volatilities on China Liberal and Vasta Platform 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 Vasta Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Liberal and Vasta Platform.
Diversification Opportunities for China Liberal and Vasta Platform
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and Vasta is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Liberal Education and Vasta Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vasta Platform 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 Vasta Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vasta Platform has no effect on the direction of China Liberal i.e., China Liberal and Vasta Platform go up and down completely randomly.
Pair Corralation between China Liberal and Vasta Platform
Given the investment horizon of 90 days China Liberal Education is expected to under-perform the Vasta Platform. In addition to that, China Liberal is 3.44 times more volatile than Vasta Platform. It trades about -0.04 of its total potential returns per unit of risk. Vasta Platform is currently generating about -0.02 per unit of volatility. If you would invest 406.00 in Vasta Platform on August 24, 2024 and sell it today you would lose (155.00) from holding Vasta Platform or give up 38.18% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
China Liberal Education vs. Vasta Platform
Performance |
| Timeline |
| China Liberal Education |
| Vasta Platform |
China Liberal and Vasta Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Liberal and Vasta Platform
The main advantage of trading using opposite China Liberal and Vasta Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Liberal position performs unexpectedly, Vasta Platform 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 Vasta Platform will offset losses from the drop in Vasta Platform's long position.| China Liberal vs. Lixiang Education Holding | China Liberal vs. Four Seasons Education | China Liberal vs. Jianzhi Education Technology | China Liberal vs. Elite Education Group |
| Vasta Platform vs. Gaotu Techedu DRC | Vasta Platform vs. TAL Education Group | Vasta Platform vs. Strategic Education | Vasta Platform vs. Afya |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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