Correlation Between Golden Sun and Elite Education
Can any of the company-specific risk be diversified away by investing in both Golden Sun and Elite 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 Golden Sun and Elite Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Sun Education and Elite Education Group, you can compare the effects of market volatilities on Golden Sun and Elite 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 Golden Sun with a short position of Elite Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Sun and Elite Education.
Diversification Opportunities for Golden Sun and Elite Education
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Elite is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and Elite Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Education Group and Golden Sun 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 Golden Sun Education are associated (or correlated) with Elite Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Education Group has no effect on the direction of Golden Sun i.e., Golden Sun and Elite Education go up and down completely randomly.
Pair Corralation between Golden Sun and Elite Education
Given the investment horizon of 90 days Golden Sun Education is expected to generate 1.5 times more return on investment than Elite Education. However, Golden Sun is 1.5 times more volatile than Elite Education Group. It trades about 0.02 of its potential returns per unit of risk. Elite Education Group is currently generating about 0.02 per unit of risk. If you would invest 549.00 in Golden Sun Education on August 24, 2024 and sell it today you would lose (260.00) from holding Golden Sun Education or give up 47.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.59% |
| Values | Daily Returns |
Golden Sun Education vs. Elite Education Group
Performance |
| Timeline |
| Golden Sun Education |
| Elite Education Group |
Golden Sun and Elite Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Sun and Elite Education
The main advantage of trading using opposite Golden Sun and Elite Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Sun position performs unexpectedly, Elite 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 Elite Education will offset losses from the drop in Elite Education's long position.| Golden Sun vs. 17 Education Technology | Golden Sun vs. Elite Education Group | Golden Sun vs. Wah Fu 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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