Correlation Between Ihuman and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both Ihuman and Bright Scholar 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 Ihuman and Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Bright Scholar Education, you can compare the effects of market volatilities on Ihuman and Bright Scholar 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 Ihuman with a short position of Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Bright Scholar.
Diversification Opportunities for Ihuman and Bright Scholar
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ihuman and Bright is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education and Ihuman 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 Ihuman Inc are associated (or correlated) with Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Ihuman i.e., Ihuman and Bright Scholar go up and down completely randomly.
Pair Corralation between Ihuman and Bright Scholar
Allowing for the 90-day total investment horizon Ihuman Inc is expected to under-perform the Bright Scholar. But the stock apears to be less risky and, when comparing its historical volatility, Ihuman Inc is 1.5 times less risky than Bright Scholar. The stock trades about -0.39 of its potential returns per unit of risk. The Bright Scholar Education is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 186.00 in Bright Scholar Education on August 27, 2024 and sell it today you would lose (3.00) from holding Bright Scholar Education or give up 1.61% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ihuman Inc vs. Bright Scholar Education
Performance |
| Timeline |
| Ihuman Inc |
| Bright Scholar Education |
Ihuman and Bright Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Bright Scholar
The main advantage of trading using opposite Ihuman and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
| Bright Scholar vs. American Public Education | Bright Scholar vs. Lincoln Educational Services | Bright Scholar vs. Adtalem Global 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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