Correlation Between Deutsche Lufthansa and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Deutsche Lufthansa and STRAYER EDUCATION 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 Deutsche Lufthansa and STRAYER EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deutsche Lufthansa AG and STRAYER EDUCATION, you can compare the effects of market volatilities on Deutsche Lufthansa and STRAYER EDUCATION 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 Deutsche Lufthansa with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Lufthansa and STRAYER EDUCATION.
Diversification Opportunities for Deutsche Lufthansa and STRAYER EDUCATION
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Deutsche and STRAYER is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Lufthansa AG and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and Deutsche Lufthansa 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 Deutsche Lufthansa AG are associated (or correlated) with STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Deutsche Lufthansa i.e., Deutsche Lufthansa and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Deutsche Lufthansa and STRAYER EDUCATION
Assuming the 90 days horizon Deutsche Lufthansa AG is expected to generate 1.4 times more return on investment than STRAYER EDUCATION. However, Deutsche Lufthansa is 1.4 times more volatile than STRAYER EDUCATION. It trades about 0.11 of its potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.13 per unit of risk. If you would invest 633.00 in Deutsche Lufthansa AG on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Deutsche Lufthansa AG or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Deutsche Lufthansa AG vs. STRAYER EDUCATION
Performance |
| Timeline |
| Deutsche Lufthansa |
| STRAYER EDUCATION |
Deutsche Lufthansa and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deutsche Lufthansa and STRAYER EDUCATION
The main advantage of trading using opposite Deutsche Lufthansa and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Lufthansa position performs unexpectedly, STRAYER EDUCATION 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Deutsche Lufthansa vs. Fidelity National Information | Deutsche Lufthansa vs. Gold Road Resources | Deutsche Lufthansa vs. BII Railway Transportation | Deutsche Lufthansa vs. Liberty Broadband |
| STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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