Correlation Between STRAYER EDUCATION and China Resources
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and China Resources Land, you can compare the effects of market volatilities on STRAYER EDUCATION and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and China Resources.
Diversification Opportunities for STRAYER EDUCATION and China Resources
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STRAYER and China is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and China Resources Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Land 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Land has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and China Resources go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and China Resources
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.66 times more return on investment than China Resources. However, STRAYER EDUCATION is 1.52 times less risky than China Resources. It trades about 0.15 of its potential returns per unit of risk. China Resources Land is currently generating about 0.03 per unit of risk. If you would invest 8,950 in STRAYER EDUCATION on October 27, 2024 and sell it today you would earn a total of 300.00 from holding STRAYER EDUCATION or generate 3.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. China Resources Land
Performance |
| Timeline |
| STRAYER EDUCATION |
| China Resources Land |
STRAYER EDUCATION and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and China Resources
The main advantage of trading using opposite STRAYER EDUCATION and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| STRAYER EDUCATION vs. TITAN MACHINERY | STRAYER EDUCATION vs. Australian Agricultural | STRAYER EDUCATION vs. Granite Construction | STRAYER EDUCATION vs. Sumitomo Mitsui Construction |
| China Resources vs. TIANDE CHEMICAL | China Resources vs. Scottish Mortgage Investment | China Resources vs. INDO RAMA SYNTHETIC | China Resources vs. Guangdong Investment Limited |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |