Correlation Between Laureate Education and Chegg
Can any of the company-specific risk be diversified away by investing in both Laureate Education and Chegg 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 Chegg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and Chegg Inc, you can compare the effects of market volatilities on Laureate Education and Chegg 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 Chegg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and Chegg.
Diversification Opportunities for Laureate Education and Chegg
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Laureate and Chegg is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and Chegg Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chegg Inc 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 Chegg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chegg Inc has no effect on the direction of Laureate Education i.e., Laureate Education and Chegg go up and down completely randomly.
Pair Corralation between Laureate Education and Chegg
Given the investment horizon of 90 days Laureate Education is expected to generate 1.76 times less return on investment than Chegg. But when comparing it to its historical volatility, Laureate Education is 2.1 times less risky than Chegg. It trades about 0.35 of its potential returns per unit of risk. Chegg Inc is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 166.00 in Chegg Inc on August 31, 2024 and sell it today you would earn a total of 64.00 from holding Chegg Inc or generate 38.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Laureate Education vs. Chegg Inc
Performance |
| Timeline |
| Laureate Education |
| Chegg Inc |
Laureate Education and Chegg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and Chegg
The main advantage of trading using opposite Laureate Education and Chegg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, Chegg 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 Chegg will offset losses from the drop in Chegg's long position.| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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