Correlation Between Stride and New Oriental
Can any of the company-specific risk be diversified away by investing in both Stride 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 Stride and New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stride Inc and New Oriental Education, you can compare the effects of market volatilities on Stride 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 Stride with a short position of New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stride and New Oriental.
Diversification Opportunities for Stride and New Oriental
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stride and New is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Stride Inc 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 Stride 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 Stride Inc 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 Stride i.e., Stride and New Oriental go up and down completely randomly.
Pair Corralation between Stride and New Oriental
Considering the 90-day investment horizon Stride Inc is expected to generate 2.98 times more return on investment than New Oriental. However, Stride is 2.98 times more volatile than New Oriental Education. It trades about 0.29 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 6,449 in Stride Inc on August 23, 2024 and sell it today you would earn a total of 3,892 from holding Stride Inc or generate 60.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stride Inc vs. New Oriental Education
Performance |
| Timeline |
| Stride Inc |
| New Oriental Education |
Stride and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stride and New Oriental
The main advantage of trading using opposite Stride and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stride 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.| Stride vs. Jianzhi Education Technology | Stride vs. 17 Education Technology | Stride vs. Elite Education Group | Stride vs. Wah Fu 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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