Correlation Between Lixiang Education and Sunlands Technology
Can any of the company-specific risk be diversified away by investing in both Lixiang Education and Sunlands Technology 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 Lixiang Education and Sunlands Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixiang Education Holding and Sunlands Technology Group, you can compare the effects of market volatilities on Lixiang Education and Sunlands Technology 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 Lixiang Education with a short position of Sunlands Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixiang Education and Sunlands Technology.
Diversification Opportunities for Lixiang Education and Sunlands Technology
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lixiang and Sunlands is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Lixiang Education Holding and Sunlands Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunlands Technology and Lixiang 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 Lixiang Education Holding are associated (or correlated) with Sunlands Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunlands Technology has no effect on the direction of Lixiang Education i.e., Lixiang Education and Sunlands Technology go up and down completely randomly.
Pair Corralation between Lixiang Education and Sunlands Technology
Given the investment horizon of 90 days Lixiang Education Holding is expected to under-perform the Sunlands Technology. In addition to that, Lixiang Education is 1.66 times more volatile than Sunlands Technology Group. It trades about -0.22 of its total potential returns per unit of risk. Sunlands Technology Group is currently generating about -0.19 per unit of volatility. If you would invest 709.00 in Sunlands Technology Group on August 28, 2024 and sell it today you would lose (104.00) from holding Sunlands Technology Group or give up 14.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lixiang Education Holding vs. Sunlands Technology Group
Performance |
| Timeline |
| Lixiang Education Holding |
| Sunlands Technology |
Lixiang Education and Sunlands Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lixiang Education and Sunlands Technology
The main advantage of trading using opposite Lixiang Education and Sunlands Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixiang Education position performs unexpectedly, Sunlands Technology 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 Sunlands Technology will offset losses from the drop in Sunlands Technology's long position.| Lixiang Education vs. China Liberal Education | Lixiang Education vs. Four Seasons Education | Lixiang Education vs. Jianzhi Education Technology | Lixiang Education vs. Elite Education Group |
| Sunlands Technology vs. American Public Education | Sunlands Technology vs. Lincoln Educational Services | Sunlands Technology vs. Adtalem Global 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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