Correlation Between Puxin and China Liberal
Can any of the company-specific risk be diversified away by investing in both Puxin and China Liberal 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 Puxin and China Liberal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puxin Limited and China Liberal Education, you can compare the effects of market volatilities on Puxin and China Liberal 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 Puxin with a short position of China Liberal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puxin and China Liberal.
Diversification Opportunities for Puxin and China Liberal
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Puxin and China is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Puxin Limited and China Liberal Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Liberal Education and Puxin 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 Puxin Limited are associated (or correlated) with China Liberal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Liberal Education has no effect on the direction of Puxin i.e., Puxin and China Liberal go up and down completely randomly.
Pair Corralation between Puxin and China Liberal
Assuming the 90 days horizon Puxin Limited is expected to generate 1.74 times more return on investment than China Liberal. However, Puxin is 1.74 times more volatile than China Liberal Education. It trades about 0.19 of its potential returns per unit of risk. China Liberal Education is currently generating about -0.03 per unit of risk. If you would invest 1.10 in Puxin Limited on August 31, 2024 and sell it today you would earn a total of 0.60 from holding Puxin Limited or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.61% |
| Values | Daily Returns |
Puxin Limited vs. China Liberal Education
Performance |
| Timeline |
| Puxin Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| China Liberal Education |
Puxin and China Liberal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puxin and China Liberal
The main advantage of trading using opposite Puxin and China Liberal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puxin position performs unexpectedly, China Liberal 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 China Liberal will offset losses from the drop in China Liberal's long position.| Puxin vs. Ihuman Inc | Puxin vs. Gaotu Techedu DRC | Puxin vs. TAL Education Group | Puxin vs. 17 Education Technology |
| China Liberal vs. Lixiang Education Holding | China Liberal vs. Four Seasons Education | China Liberal vs. Jianzhi Education Technology | China Liberal vs. Elite Education Group |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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