Correlation Between Laureate Education and X FAB
Can any of the company-specific risk be diversified away by investing in both Laureate Education and X FAB 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 X FAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and X FAB Silicon Foundries, you can compare the effects of market volatilities on Laureate Education and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and X FAB.
Diversification Opportunities for Laureate Education and X FAB
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laureate and XFB is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of Laureate Education i.e., Laureate Education and X FAB go up and down completely randomly.
Pair Corralation between Laureate Education and X FAB
Assuming the 90 days trading horizon Laureate Education is expected to generate 0.85 times more return on investment than X FAB. However, Laureate Education is 1.18 times less risky than X FAB. It trades about 0.08 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about -0.02 per unit of risk. If you would invest 855.00 in Laureate Education on September 30, 2024 and sell it today you would earn a total of 905.00 from holding Laureate Education or generate 105.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laureate Education vs. X FAB Silicon Foundries
Performance |
| Timeline |
| Laureate Education |
| X FAB Silicon |
Laureate Education and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and X FAB
The main advantage of trading using opposite Laureate Education and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| Laureate Education vs. IDP EDUCATION LTD | Laureate Education vs. TAL Education Group | Laureate Education vs. Grand Canyon Education | Laureate Education vs. Graham Holdings Co |
| X FAB vs. Verizon Communications | X FAB vs. Norwegian Air Shuttle | X FAB vs. HEMISPHERE EGY | X FAB vs. SEALED AIR |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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