Correlation Between Laureate Education and New Oriental
Can any of the company-specific risk be diversified away by investing in both Laureate Education and New Oriental 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 New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Laureate Education and New Oriental Education, you can compare the effects of market volatilities on Laureate Education and New Oriental 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 New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Laureate Education and New Oriental.
Diversification Opportunities for Laureate Education and New Oriental
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Laureate and New is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Laureate Education and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education 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 New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Laureate Education i.e., Laureate Education and New Oriental go up and down completely randomly.
Pair Corralation between Laureate Education and New Oriental
Given the investment horizon of 90 days Laureate Education is expected to generate 0.91 times more return on investment than New Oriental. However, Laureate Education is 1.1 times less risky than New Oriental. It trades about 0.38 of its potential returns per unit of risk. New Oriental Education is currently generating about -0.23 per unit of risk. If you would invest 1,562 in Laureate Education on August 23, 2024 and sell it today you would earn a total of 365.00 from holding Laureate Education or generate 23.37% 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. New Oriental Education
Performance |
| Timeline |
| Laureate Education |
| New Oriental Education |
Laureate Education and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Laureate Education and New Oriental
The main advantage of trading using opposite Laureate Education and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Laureate Education position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental'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 |
| New Oriental vs. Jianzhi Education Technology | New Oriental vs. 17 Education Technology | New Oriental vs. Elite Education Group | New Oriental vs. Wah Fu 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |