Correlation Between New Oriental and Puxin
Can any of the company-specific risk be diversified away by investing in both New Oriental and Puxin 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 Puxin 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 Puxin Limited, you can compare the effects of market volatilities on New Oriental and Puxin 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 Puxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Oriental and Puxin.
Diversification Opportunities for New Oriental and Puxin
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between New and Puxin is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education and Puxin Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Puxin Limited 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 Puxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Puxin Limited has no effect on the direction of New Oriental i.e., New Oriental and Puxin go up and down completely randomly.
Pair Corralation between New Oriental and Puxin
If you would invest 4,209 in New Oriental Education on August 31, 2024 and sell it today you would earn a total of 1,623 from holding New Oriental Education or generate 38.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 0.27% |
| Values | Daily Returns |
New Oriental Education vs. Puxin Limited
Performance |
| Timeline |
| New Oriental Education |
| Puxin Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
New Oriental and Puxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Oriental and Puxin
The main advantage of trading using opposite New Oriental and Puxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Oriental position performs unexpectedly, Puxin 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 Puxin will offset losses from the drop in Puxin'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 |
| Puxin vs. Ihuman Inc | Puxin vs. Gaotu Techedu DRC | Puxin vs. TAL Education Group | Puxin vs. 17 Education Technology |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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