Correlation Between Coursera and Wingstop
Can any of the company-specific risk be diversified away by investing in both Coursera and Wingstop 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 Coursera and Wingstop into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coursera and Wingstop, you can compare the effects of market volatilities on Coursera and Wingstop 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 Coursera with a short position of Wingstop. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coursera and Wingstop.
Diversification Opportunities for Coursera and Wingstop
Poor diversification
The 3 months correlation between Coursera and Wingstop is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Coursera and Wingstop in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wingstop and Coursera 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 Coursera are associated (or correlated) with Wingstop. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wingstop has no effect on the direction of Coursera i.e., Coursera and Wingstop go up and down completely randomly.
Pair Corralation between Coursera and Wingstop
Given the investment horizon of 90 days Coursera is expected to generate 1.29 times more return on investment than Wingstop. However, Coursera is 1.29 times more volatile than Wingstop. It trades about 0.24 of its potential returns per unit of risk. Wingstop is currently generating about 0.28 per unit of risk. If you would invest 705.00 in Coursera on August 31, 2024 and sell it today you would earn a total of 115.00 from holding Coursera or generate 16.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Coursera vs. Wingstop
Performance |
| Timeline |
| Coursera |
| Wingstop |
Coursera and Wingstop Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coursera and Wingstop
The main advantage of trading using opposite Coursera and Wingstop positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coursera position performs unexpectedly, Wingstop 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 Wingstop will offset losses from the drop in Wingstop's long position.| Coursera vs. Chegg Inc | Coursera vs. Skillsoft Corp | Coursera vs. Laureate Education | Coursera vs. Udemy Inc |
| Wingstop vs. RLJ Lodging Trust | Wingstop vs. Aquagold International | Wingstop vs. Stepstone Group | Wingstop vs. Morningstar Unconstrained Allocation |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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