Correlation Between Cogna Educacao and Sunlands Technology
Can any of the company-specific risk be diversified away by investing in both Cogna Educacao and Sunlands Technology 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 Cogna Educacao and Sunlands Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cogna Educacao SA and Sunlands Technology Group, you can compare the effects of market volatilities on Cogna Educacao and Sunlands Technology 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 Cogna Educacao with a short position of Sunlands Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cogna Educacao and Sunlands Technology.
Diversification Opportunities for Cogna Educacao and Sunlands Technology
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cogna and Sunlands is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Cogna Educacao SA and Sunlands Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunlands Technology and Cogna Educacao 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 Cogna Educacao SA are associated (or correlated) with Sunlands Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunlands Technology has no effect on the direction of Cogna Educacao i.e., Cogna Educacao and Sunlands Technology go up and down completely randomly.
Pair Corralation between Cogna Educacao and Sunlands Technology
Assuming the 90 days horizon Cogna Educacao SA is expected to generate 1.63 times more return on investment than Sunlands Technology. However, Cogna Educacao is 1.63 times more volatile than Sunlands Technology Group. It trades about 0.03 of its potential returns per unit of risk. Sunlands Technology Group is currently generating about -0.19 per unit of risk. If you would invest 27.00 in Cogna Educacao SA on August 28, 2024 and sell it today you would earn a total of 0.00 from holding Cogna Educacao SA or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cogna Educacao SA vs. Sunlands Technology Group
Performance |
| Timeline |
| Cogna Educacao SA |
| Sunlands Technology |
Cogna Educacao and Sunlands Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cogna Educacao and Sunlands Technology
The main advantage of trading using opposite Cogna Educacao and Sunlands Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cogna Educacao position performs unexpectedly, Sunlands Technology 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 Sunlands Technology will offset losses from the drop in Sunlands Technology's long position.| Cogna Educacao vs. Universal Technical Institute | Cogna Educacao vs. ATA Creativity Global | Cogna Educacao vs. Sunlands Technology Group | Cogna Educacao vs. Vasta Platform |
| Sunlands Technology vs. American Public Education | Sunlands Technology vs. Lincoln Educational Services | Sunlands Technology vs. Adtalem Global 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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