Correlation Between Adtalem Global and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Adtalem Global and CHINA EDUCATION 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 Adtalem Global and CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adtalem Global Education and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Adtalem Global and CHINA EDUCATION 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 Adtalem Global with a short position of CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adtalem Global and CHINA EDUCATION.
Diversification Opportunities for Adtalem Global and CHINA EDUCATION
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adtalem and CHINA is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Adtalem Global Education and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP and Adtalem Global 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 Adtalem Global Education are associated (or correlated) with CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Adtalem Global i.e., Adtalem Global and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Adtalem Global and CHINA EDUCATION
Assuming the 90 days trading horizon Adtalem Global Education is expected to generate 0.51 times more return on investment than CHINA EDUCATION. However, Adtalem Global Education is 1.95 times less risky than CHINA EDUCATION. It trades about 0.09 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.04 per unit of risk. If you would invest 3,660 in Adtalem Global Education on November 1, 2024 and sell it today you would earn a total of 5,890 from holding Adtalem Global Education or generate 160.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adtalem Global Education vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Adtalem Global Education |
| CHINA EDUCATION GROUP |
Adtalem Global and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adtalem Global and CHINA EDUCATION
The main advantage of trading using opposite Adtalem Global and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adtalem Global position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Adtalem Global vs. Apple Inc | Adtalem Global vs. Apple Inc | Adtalem Global vs. Apple Inc | Adtalem Global vs. Apple Inc |
| CHINA EDUCATION vs. QINGCI GAMES INC | CHINA EDUCATION vs. Carsales | CHINA EDUCATION vs. GameStop Corp | CHINA EDUCATION vs. TROPHY GAMES DEV |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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