Correlation Between Puxin and Four Seasons
Can any of the company-specific risk be diversified away by investing in both Puxin and Four Seasons 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 Four Seasons into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puxin Limited and Four Seasons Education, you can compare the effects of market volatilities on Puxin and Four Seasons 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 Four Seasons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puxin and Four Seasons.
Diversification Opportunities for Puxin and Four Seasons
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Puxin and Four is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Puxin Limited and Four Seasons Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Seasons 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 Four Seasons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Seasons Education has no effect on the direction of Puxin i.e., Puxin and Four Seasons go up and down completely randomly.
Pair Corralation between Puxin and Four Seasons
Assuming the 90 days horizon Puxin Limited is expected to generate 0.33 times more return on investment than Four Seasons. However, Puxin Limited is 3.04 times less risky than Four Seasons. It trades about 0.19 of its potential returns per unit of risk. Four Seasons Education is currently generating about 0.05 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 Together |
| Strength | Insignificant |
| Accuracy | 5.6% |
| Values | Daily Returns |
Puxin Limited vs. Four Seasons Education
Performance |
| Timeline |
| Puxin Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Four Seasons Education |
Puxin and Four Seasons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puxin and Four Seasons
The main advantage of trading using opposite Puxin and Four Seasons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puxin position performs unexpectedly, Four Seasons 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 Four Seasons will offset losses from the drop in Four Seasons' long position.| Puxin vs. Ihuman Inc | Puxin vs. Gaotu Techedu DRC | Puxin vs. TAL Education Group | Puxin vs. 17 Education Technology |
| Four Seasons vs. Wah Fu Education | Four Seasons vs. Sunlands Technology Group | Four Seasons vs. 51Talk Online Education | Four Seasons vs. China Liberal 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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