Correlation Between Meta Financial and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Meta Financial and STRAYER EDUCATION 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 Meta Financial and STRAYER EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Meta Financial Group and STRAYER EDUCATION, you can compare the effects of market volatilities on Meta Financial and STRAYER EDUCATION 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 Meta Financial with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Meta Financial and STRAYER EDUCATION.
Diversification Opportunities for Meta Financial and STRAYER EDUCATION
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Meta and STRAYER is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Meta Financial Group and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and Meta Financial 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 Meta Financial Group are associated (or correlated) with STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Meta Financial i.e., Meta Financial and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Meta Financial and STRAYER EDUCATION
Assuming the 90 days horizon Meta Financial Group is expected to generate 1.19 times more return on investment than STRAYER EDUCATION. However, Meta Financial is 1.19 times more volatile than STRAYER EDUCATION. It trades about 0.27 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.24 per unit of risk. If you would invest 7,150 in Meta Financial Group on November 6, 2024 and sell it today you would earn a total of 600.00 from holding Meta Financial Group or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Meta Financial Group vs. STRAYER EDUCATION
Performance |
| Timeline |
| Meta Financial Group |
| STRAYER EDUCATION |
Meta Financial and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Meta Financial and STRAYER EDUCATION
The main advantage of trading using opposite Meta Financial and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Financial position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Meta Financial vs. POSBO UNSPADRS20YC1 | Meta Financial vs. Postal Savings Bank | Meta Financial vs. Oversea Chinese Banking | Meta Financial vs. UNICREDIT SPA ADR |
| STRAYER EDUCATION vs. DELTA AIR LINES | STRAYER EDUCATION vs. Ryanair Holdings plc | STRAYER EDUCATION vs. Osisko Metals | STRAYER EDUCATION vs. Fortescue Metals 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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