Correlation Between Elite Education and ATA Creativity
Can any of the company-specific risk be diversified away by investing in both Elite Education and ATA Creativity 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 Elite Education and ATA Creativity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Education Group and ATA Creativity Global, you can compare the effects of market volatilities on Elite Education and ATA Creativity 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 Elite Education with a short position of ATA Creativity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Education and ATA Creativity.
Diversification Opportunities for Elite Education and ATA Creativity
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elite and ATA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elite Education Group and ATA Creativity Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATA Creativity Global and Elite Education 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 Elite Education Group are associated (or correlated) with ATA Creativity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATA Creativity Global has no effect on the direction of Elite Education i.e., Elite Education and ATA Creativity go up and down completely randomly.
Pair Corralation between Elite Education and ATA Creativity
Given the investment horizon of 90 days Elite Education is expected to generate 1.6 times less return on investment than ATA Creativity. In addition to that, Elite Education is 1.03 times more volatile than ATA Creativity Global. It trades about 0.11 of its total potential returns per unit of risk. ATA Creativity Global is currently generating about 0.18 per unit of volatility. If you would invest 60.00 in ATA Creativity Global on August 28, 2024 and sell it today you would earn a total of 42.00 from holding ATA Creativity Global or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.83% |
| Values | Daily Returns |
Elite Education Group vs. ATA Creativity Global
Performance |
| Timeline |
| Elite Education Group |
| ATA Creativity Global |
Elite Education and ATA Creativity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Education and ATA Creativity
The main advantage of trading using opposite Elite Education and ATA Creativity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Education position performs unexpectedly, ATA Creativity 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 ATA Creativity will offset losses from the drop in ATA Creativity's long position.| Elite Education vs. Golden Sun Education | Elite Education vs. Jianzhi Education Technology | Elite Education vs. Genius Group | Elite Education vs. Lixiang Education Holding |
| ATA Creativity vs. Universal Technical Institute | ATA Creativity vs. Cogna Educacao SA | ATA Creativity vs. Sunlands Technology Group | ATA Creativity vs. American Public 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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