Correlation Between TAL Education and Lion Biotechnologies
Can any of the company-specific risk be diversified away by investing in both TAL Education and Lion Biotechnologies 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 TAL Education and Lion Biotechnologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TAL Education Group and Lion Biotechnologies, you can compare the effects of market volatilities on TAL Education and Lion Biotechnologies 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 TAL Education with a short position of Lion Biotechnologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of TAL Education and Lion Biotechnologies.
Diversification Opportunities for TAL Education and Lion Biotechnologies
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TAL and Lion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TAL Education Group and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies and TAL Education 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 TAL Education Group are associated (or correlated) with Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of TAL Education i.e., TAL Education and Lion Biotechnologies go up and down completely randomly.
Pair Corralation between TAL Education and Lion Biotechnologies
Assuming the 90 days trading horizon TAL Education Group is expected to generate 1.06 times more return on investment than Lion Biotechnologies. However, TAL Education is 1.06 times more volatile than Lion Biotechnologies. It trades about 0.09 of its potential returns per unit of risk. Lion Biotechnologies is currently generating about -0.09 per unit of risk. If you would invest 750.00 in TAL Education Group on August 25, 2024 and sell it today you would earn a total of 175.00 from holding TAL Education Group or generate 23.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TAL Education Group vs. Lion Biotechnologies
Performance |
| Timeline |
| TAL Education Group |
| Lion Biotechnologies |
TAL Education and Lion Biotechnologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TAL Education and Lion Biotechnologies
The main advantage of trading using opposite TAL Education and Lion Biotechnologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TAL Education position performs unexpectedly, Lion Biotechnologies 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 Lion Biotechnologies will offset losses from the drop in Lion Biotechnologies' long position.| TAL Education vs. Host Hotels Resorts | TAL Education vs. MELIA HOTELS | TAL Education vs. EAT WELL INVESTMENT | TAL Education vs. PennantPark Investment |
| Lion Biotechnologies vs. TAL Education Group | Lion Biotechnologies vs. PICKN PAY STORES | Lion Biotechnologies vs. MARKET VECTR RETAIL | Lion Biotechnologies vs. IDP EDUCATION LTD |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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