Correlation Between Laureate Education and ATRESMEDIA
Can any of the company-specific risk be diversified away by investing in both Laureate Education and ATRESMEDIA 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 ATRESMEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and ATRESMEDIA, you can compare the effects of market volatilities on Laureate Education and ATRESMEDIA 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 ATRESMEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and ATRESMEDIA.
Diversification Opportunities for Laureate Education and ATRESMEDIA
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Laureate and ATRESMEDIA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and ATRESMEDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATRESMEDIA 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 ATRESMEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATRESMEDIA has no effect on the direction of Laureate Education i.e., Laureate Education and ATRESMEDIA go up and down completely randomly.
Pair Corralation between Laureate Education and ATRESMEDIA
Assuming the 90 days trading horizon Laureate Education is expected to generate 0.86 times more return on investment than ATRESMEDIA. However, Laureate Education is 1.16 times less risky than ATRESMEDIA. It trades about -0.02 of its potential returns per unit of risk. ATRESMEDIA is currently generating about -0.05 per unit of risk. If you would invest 1,760 in Laureate Education on October 12, 2024 and sell it today you would lose (10.00) from holding Laureate Education or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Laureate Education vs. ATRESMEDIA
Performance |
| Timeline |
| Laureate Education |
| ATRESMEDIA |
Laureate Education and ATRESMEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and ATRESMEDIA
The main advantage of trading using opposite Laureate Education and ATRESMEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, ATRESMEDIA 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 ATRESMEDIA will offset losses from the drop in ATRESMEDIA's long position.| Laureate Education vs. Inspire Medical Systems | Laureate Education vs. Alfa Financial Software | Laureate Education vs. FANDIFI TECHNOLOGY P | Laureate Education vs. MEDICAL FACILITIES NEW |
| ATRESMEDIA vs. Laureate Education | ATRESMEDIA vs. PennantPark Investment | ATRESMEDIA vs. Grand Canyon Education | ATRESMEDIA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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