Correlation Between Puxin and Tarena Intl
Can any of the company-specific risk be diversified away by investing in both Puxin and Tarena Intl 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 Tarena Intl into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Puxin Limited and Tarena Intl Adr, you can compare the effects of market volatilities on Puxin and Tarena Intl 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 Tarena Intl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Puxin and Tarena Intl.
Diversification Opportunities for Puxin and Tarena Intl
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Puxin and Tarena is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Puxin Limited and Tarena Intl Adr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tarena Intl Adr 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 Tarena Intl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tarena Intl Adr has no effect on the direction of Puxin i.e., Puxin and Tarena Intl go up and down completely randomly.
Pair Corralation between Puxin and Tarena Intl
Assuming the 90 days horizon Puxin Limited is expected to generate 3.44 times more return on investment than Tarena Intl. However, Puxin is 3.44 times more volatile than Tarena Intl Adr. It trades about 0.19 of its potential returns per unit of risk. Tarena Intl Adr is currently generating about -0.09 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 | Insignificant |
| Accuracy | 16.18% |
| Values | Daily Returns |
Puxin Limited vs. Tarena Intl Adr
Performance |
| Timeline |
| Puxin Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Tarena Intl Adr |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Puxin and Tarena Intl Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Puxin and Tarena Intl
The main advantage of trading using opposite Puxin and Tarena Intl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Puxin position performs unexpectedly, Tarena Intl 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 Tarena Intl will offset losses from the drop in Tarena Intl's long position.| Puxin vs. Ihuman Inc | Puxin vs. Gaotu Techedu DRC | Puxin vs. TAL Education Group | Puxin vs. 17 Education Technology |
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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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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