Correlation Between STRAYER EDUCATION and VARIOUS EATERIES
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and VARIOUS EATERIES 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 VARIOUS EATERIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and VARIOUS EATERIES LS, you can compare the effects of market volatilities on STRAYER EDUCATION and VARIOUS EATERIES 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 VARIOUS EATERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and VARIOUS EATERIES.
Diversification Opportunities for STRAYER EDUCATION and VARIOUS EATERIES
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between STRAYER and VARIOUS is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and VARIOUS EATERIES LS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VARIOUS EATERIES 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 VARIOUS EATERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VARIOUS EATERIES has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and VARIOUS EATERIES go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and VARIOUS EATERIES
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 1.45 times more return on investment than VARIOUS EATERIES. However, STRAYER EDUCATION is 1.45 times more volatile than VARIOUS EATERIES LS. It trades about 0.37 of its potential returns per unit of risk. VARIOUS EATERIES LS is currently generating about 0.01 per unit of risk. If you would invest 7,900 in STRAYER EDUCATION on August 29, 2024 and sell it today you would earn a total of 1,500 from holding STRAYER EDUCATION or generate 18.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. VARIOUS EATERIES LS
Performance |
| Timeline |
| STRAYER EDUCATION |
| VARIOUS EATERIES |
STRAYER EDUCATION and VARIOUS EATERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and VARIOUS EATERIES
The main advantage of trading using opposite STRAYER EDUCATION and VARIOUS EATERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, VARIOUS EATERIES 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 VARIOUS EATERIES will offset losses from the drop in VARIOUS EATERIES's long position.| STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Apple Inc | STRAYER EDUCATION vs. Superior Plus Corp | STRAYER EDUCATION vs. SIVERS SEMICONDUCTORS AB |
| VARIOUS EATERIES vs. STRAYER EDUCATION | VARIOUS EATERIES vs. GAMING FAC SA | VARIOUS EATERIES vs. GigaMedia | VARIOUS EATERIES vs. TAL 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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