Correlation Between Ihuman and Laureate Education
Can any of the company-specific risk be diversified away by investing in both Ihuman and Laureate 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 Ihuman and Laureate Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ihuman Inc and Laureate Education, you can compare the effects of market volatilities on Ihuman and Laureate 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 Ihuman with a short position of Laureate Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ihuman and Laureate Education.
Diversification Opportunities for Ihuman and Laureate Education
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ihuman and Laureate is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ihuman Inc and Laureate Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Laureate 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 Laureate Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Laureate Education has no effect on the direction of Ihuman i.e., Ihuman and Laureate Education go up and down completely randomly.
Pair Corralation between Ihuman and Laureate Education
Allowing for the 90-day total investment horizon Ihuman is expected to generate 2.81 times less return on investment than Laureate Education. In addition to that, Ihuman is 2.39 times more volatile than Laureate Education. It trades about 0.01 of its total potential returns per unit of risk. Laureate Education is currently generating about 0.09 per unit of volatility. If you would invest 964.00 in Laureate Education on August 27, 2024 and sell it today you would earn a total of 988.00 from holding Laureate Education or generate 102.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ihuman Inc vs. Laureate Education
Performance |
| Timeline |
| Ihuman Inc |
| Laureate Education |
Ihuman and Laureate Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ihuman and Laureate Education
The main advantage of trading using opposite Ihuman and Laureate Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ihuman position performs unexpectedly, Laureate 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 Laureate Education will offset losses from the drop in Laureate Education's long position.| Ihuman vs. Boqii Holding Limited | Ihuman vs. Lixiang Education Holding | Ihuman vs. Huize Holding | Ihuman vs. Kuke Music Holding |
| Laureate Education vs. Universal Technical Institute | Laureate Education vs. Strategic Education | Laureate Education vs. Grand Canyon Education | Laureate Education vs. American Public 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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