Correlation Between New Oriental and 2U
Can any of the company-specific risk be diversified away by investing in both New Oriental and 2U 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 2U 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 2U Inc, you can compare the effects of market volatilities on New Oriental and 2U 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 2U. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Oriental and 2U.
Diversification Opportunities for New Oriental and 2U
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between New and 2U is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education and 2U Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 2U 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 2U. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 2U Inc has no effect on the direction of New Oriental i.e., New Oriental and 2U go up and down completely randomly.
Pair Corralation between New Oriental and 2U
If you would invest (100.00) in 2U Inc on January 5, 2025 and sell it today you would earn a total of 100.00 from holding 2U Inc or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
New Oriental Education vs. 2U Inc
Performance |
| Timeline |
| New Oriental Education |
| 2U Inc |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
New Oriental and 2U Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Oriental and 2U
The main advantage of trading using opposite New Oriental and 2U positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Oriental position performs unexpectedly, 2U 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 2U will offset losses from the drop in 2U'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 |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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