Correlation Between STRAYER EDUCATION and KENTIMA HOLDING
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and KENTIMA HOLDING 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 KENTIMA HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and KENTIMA HOLDING AB, you can compare the effects of market volatilities on STRAYER EDUCATION and KENTIMA HOLDING 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 KENTIMA HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and KENTIMA HOLDING.
Diversification Opportunities for STRAYER EDUCATION and KENTIMA HOLDING
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STRAYER and KENTIMA is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and KENTIMA HOLDING AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENTIMA HOLDING AB 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 KENTIMA HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENTIMA HOLDING AB has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and KENTIMA HOLDING go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and KENTIMA HOLDING
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 2.7 times less return on investment than KENTIMA HOLDING. But when comparing it to its historical volatility, STRAYER EDUCATION is 4.79 times less risky than KENTIMA HOLDING. It trades about 0.12 of its potential returns per unit of risk. KENTIMA HOLDING AB is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 12.00 in KENTIMA HOLDING AB on September 12, 2024 and sell it today you would earn a total of 2.00 from holding KENTIMA HOLDING AB or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.46% |
| Values | Daily Returns |
STRAYER EDUCATION vs. KENTIMA HOLDING AB
Performance |
| Timeline |
| STRAYER EDUCATION |
| KENTIMA HOLDING AB |
STRAYER EDUCATION and KENTIMA HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and KENTIMA HOLDING
The main advantage of trading using opposite STRAYER EDUCATION and KENTIMA HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, KENTIMA HOLDING 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 KENTIMA HOLDING will offset losses from the drop in KENTIMA HOLDING's long position.| STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc |
| KENTIMA HOLDING vs. Burlington Stores | KENTIMA HOLDING vs. GigaMedia | KENTIMA HOLDING vs. Cleanaway Waste Management | KENTIMA HOLDING vs. FUTURE GAMING GRP |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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