Correlation Between New Oriental and Stride
Can any of the company-specific risk be diversified away by investing in both New Oriental and Stride 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 New Oriental and Stride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Oriental Education and Stride Inc, you can compare the effects of market volatilities on New Oriental and Stride 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 New Oriental with a short position of Stride. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Oriental and Stride.
Diversification Opportunities for New Oriental and Stride
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between New and Stride is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education and Stride Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stride Inc and New Oriental 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 New Oriental Education are associated (or correlated) with Stride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stride Inc has no effect on the direction of New Oriental i.e., New Oriental and Stride go up and down completely randomly.
Pair Corralation between New Oriental and Stride
Considering the 90-day investment horizon New Oriental Education is expected to under-perform the Stride. In addition to that, New Oriental is 1.21 times more volatile than Stride Inc. It trades about -0.21 of its total potential returns per unit of risk. Stride Inc is currently generating about 0.47 per unit of volatility. If you would invest 9,101 in Stride Inc on August 28, 2024 and sell it today you would earn a total of 1,506 from holding Stride Inc or generate 16.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Oriental Education vs. Stride Inc
Performance |
| Timeline |
| New Oriental Education |
| Stride Inc |
New Oriental and Stride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Oriental and Stride
The main advantage of trading using opposite New Oriental and Stride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Oriental position performs unexpectedly, Stride 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 Stride will offset losses from the drop in Stride's long position.| New Oriental vs. Gaotu Techedu DRC | New Oriental vs. 17 Education Technology | New Oriental vs. Chegg Inc | New Oriental vs. Elite Education Group |
| Stride vs. Laureate Education | Stride vs. American Public Education | Stride vs. Lincoln Educational Services | Stride 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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