Correlation Between STRAYER EDUCATION and 5TH PLANET
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and 5TH PLANET 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 STRAYER EDUCATION and 5TH PLANET into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and 5TH PLANET GAMES, you can compare the effects of market volatilities on STRAYER EDUCATION and 5TH PLANET 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 STRAYER EDUCATION with a short position of 5TH PLANET. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and 5TH PLANET.
Diversification Opportunities for STRAYER EDUCATION and 5TH PLANET
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between STRAYER and 5TH is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and 5TH PLANET GAMES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 5TH PLANET GAMES and STRAYER 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 STRAYER EDUCATION are associated (or correlated) with 5TH PLANET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 5TH PLANET GAMES has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and 5TH PLANET go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and 5TH PLANET
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.31 times more return on investment than 5TH PLANET. However, STRAYER EDUCATION is 3.21 times less risky than 5TH PLANET. It trades about 0.05 of its potential returns per unit of risk. 5TH PLANET GAMES is currently generating about 0.01 per unit of risk. If you would invest 6,717 in STRAYER EDUCATION on October 16, 2024 and sell it today you would earn a total of 2,333 from holding STRAYER EDUCATION or generate 34.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. 5TH PLANET GAMES
Performance |
| Timeline |
| STRAYER EDUCATION |
| 5TH PLANET GAMES |
STRAYER EDUCATION and 5TH PLANET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and 5TH PLANET
The main advantage of trading using opposite STRAYER EDUCATION and 5TH PLANET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, 5TH PLANET 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 5TH PLANET will offset losses from the drop in 5TH PLANET's long position.| STRAYER EDUCATION vs. Global Ship Lease | STRAYER EDUCATION vs. American Eagle Outfitters | STRAYER EDUCATION vs. GRENKELEASING Dusseldorf | STRAYER EDUCATION vs. WESANA HEALTH HOLD |
| 5TH PLANET vs. Semiconductor Manufacturing International | 5TH PLANET vs. EEDUCATION ALBERT AB | 5TH PLANET vs. STRAYER EDUCATION | 5TH PLANET vs. Tower Semiconductor |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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