Correlation Between STRAYER EDUCATION and British American
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and British American 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 British American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and British American Tobacco, you can compare the effects of market volatilities on STRAYER EDUCATION and British American 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 British American. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and British American.
Diversification Opportunities for STRAYER EDUCATION and British American
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STRAYER and British is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and British American Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on British American Tobacco 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 British American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of British American Tobacco has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and British American go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and British American
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.55 times more return on investment than British American. However, STRAYER EDUCATION is 1.82 times less risky than British American. It trades about 0.11 of its potential returns per unit of risk. British American Tobacco is currently generating about -0.04 per unit of risk. If you would invest 9,050 in STRAYER EDUCATION on November 28, 2024 and sell it today you would earn a total of 250.00 from holding STRAYER EDUCATION or generate 2.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. British American Tobacco
Performance |
| Timeline |
| STRAYER EDUCATION |
| British American Tobacco |
STRAYER EDUCATION and British American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and British American
The main advantage of trading using opposite STRAYER EDUCATION and British American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, British American 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 British American will offset losses from the drop in British American's long position.| STRAYER EDUCATION vs. EMBARK EDUCATION LTD | STRAYER EDUCATION vs. OURGAME INTHOLDL 00005 | STRAYER EDUCATION vs. MOVIE GAMES SA | STRAYER EDUCATION vs. GigaMedia |
| British American vs. CVR Medical Corp | British American vs. Ebro Foods SA | British American vs. Carnegie Clean Energy | British American vs. ULTRA CLEAN HLDGS |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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