Correlation Between Alliance Select and STI Education
Can any of the company-specific risk be diversified away by investing in both Alliance Select and STI 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 Alliance Select and STI Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliance Select Foods and STI Education Systems, you can compare the effects of market volatilities on Alliance Select and STI 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 Alliance Select with a short position of STI Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliance Select and STI Education.
Diversification Opportunities for Alliance Select and STI Education
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Alliance and STI is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alliance Select Foods and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems and Alliance Select 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 Alliance Select Foods are associated (or correlated) with STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Alliance Select i.e., Alliance Select and STI Education go up and down completely randomly.
Pair Corralation between Alliance Select and STI Education
Assuming the 90 days trading horizon Alliance Select Foods is expected to under-perform the STI Education. In addition to that, Alliance Select is 1.19 times more volatile than STI Education Systems. It trades about -0.14 of its total potential returns per unit of risk. STI Education Systems is currently generating about 0.06 per unit of volatility. If you would invest 126.00 in STI Education Systems on August 27, 2024 and sell it today you would earn a total of 2.00 from holding STI Education Systems or generate 1.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 45.0% |
| Values | Daily Returns |
Alliance Select Foods vs. STI Education Systems
Performance |
| Timeline |
| Alliance Select Foods |
| STI Education Systems |
Alliance Select and STI Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliance Select and STI Education
The main advantage of trading using opposite Alliance Select and STI Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliance Select position performs unexpectedly, STI 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 STI Education will offset losses from the drop in STI Education's long position.| Alliance Select vs. Atlas Consolidated Mining | Alliance Select vs. Semirara Mining Corp | Alliance Select vs. Apex Mining Co | Alliance Select vs. Lepanto Consolidated Mining |
| STI Education vs. Allhome Corp | STI Education vs. Altus Property Ventures | STI Education vs. AgriNurture | STI Education vs. Wilcon Depot |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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