Correlation Between Elite Education and Bloomin Brands
Can any of the company-specific risk be diversified away by investing in both Elite Education and Bloomin Brands 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 Bloomin Brands 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 Bloomin Brands, you can compare the effects of market volatilities on Elite Education and Bloomin Brands 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 Bloomin Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Education and Bloomin Brands.
Diversification Opportunities for Elite Education and Bloomin Brands
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Elite and Bloomin is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Elite Education Group and Bloomin Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bloomin Brands 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 Bloomin Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bloomin Brands has no effect on the direction of Elite Education i.e., Elite Education and Bloomin Brands go up and down completely randomly.
Pair Corralation between Elite Education and Bloomin Brands
Given the investment horizon of 90 days Elite Education Group is expected to generate 2.21 times more return on investment than Bloomin Brands. However, Elite Education is 2.21 times more volatile than Bloomin Brands. It trades about -0.01 of its potential returns per unit of risk. Bloomin Brands is currently generating about -0.07 per unit of risk. If you would invest 188.00 in Elite Education Group on November 9, 2024 and sell it today you would lose (87.00) from holding Elite Education Group or give up 46.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.75% |
| Values | Daily Returns |
Elite Education Group vs. Bloomin Brands
Performance |
| Timeline |
| Elite Education Group |
| Bloomin Brands |
Elite Education and Bloomin Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Education and Bloomin Brands
The main advantage of trading using opposite Elite Education and Bloomin Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Education position performs unexpectedly, Bloomin Brands 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 Bloomin Brands will offset losses from the drop in Bloomin Brands' 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 |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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