Correlation Between Laureate Education and Par Pacific
Can any of the company-specific risk be diversified away by investing in both Laureate Education and Par Pacific 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 Laureate Education and Par Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and Par Pacific Holdings, you can compare the effects of market volatilities on Laureate Education and Par Pacific 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 Laureate Education with a short position of Par Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and Par Pacific.
Diversification Opportunities for Laureate Education and Par Pacific
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Laureate and Par is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and Par Pacific Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Par Pacific Holdings and Laureate 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 Laureate Education are associated (or correlated) with Par Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Par Pacific Holdings has no effect on the direction of Laureate Education i.e., Laureate Education and Par Pacific go up and down completely randomly.
Pair Corralation between Laureate Education and Par Pacific
Assuming the 90 days trading horizon Laureate Education is expected to generate 0.77 times more return on investment than Par Pacific. However, Laureate Education is 1.3 times less risky than Par Pacific. It trades about 0.08 of its potential returns per unit of risk. Par Pacific Holdings is currently generating about 0.0 per unit of risk. If you would invest 850.00 in Laureate Education on September 12, 2024 and sell it today you would earn a total of 890.00 from holding Laureate Education or generate 104.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Laureate Education vs. Par Pacific Holdings
Performance |
| Timeline |
| Laureate Education |
| Par Pacific Holdings |
Laureate Education and Par Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and Par Pacific
The main advantage of trading using opposite Laureate Education and Par Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, Par Pacific 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 Par Pacific will offset losses from the drop in Par Pacific's long position.| Laureate Education vs. AWILCO DRILLING PLC | Laureate Education vs. EHEALTH | Laureate Education vs. National Health Investors | Laureate Education vs. STRAYER EDUCATION |
| Par Pacific vs. IDP EDUCATION LTD | Par Pacific vs. Laureate Education | Par Pacific vs. TAL Education Group | Par Pacific vs. BRIT AMER TOBACCO |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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