Correlation Between STRAYER EDUCATION and Marks
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and Marks 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 Marks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Marks and Spencer, you can compare the effects of market volatilities on STRAYER EDUCATION and Marks 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 Marks. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Marks.
Diversification Opportunities for STRAYER EDUCATION and Marks
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between STRAYER and Marks is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Marks and Spencer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks and Spencer 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 Marks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks and Spencer has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Marks go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Marks
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to generate 0.46 times more return on investment than Marks. However, STRAYER EDUCATION is 2.18 times less risky than Marks. It trades about 0.14 of its potential returns per unit of risk. Marks and Spencer is currently generating about -0.26 per unit of risk. If you would invest 9,100 in STRAYER EDUCATION on October 21, 2024 and sell it today you would earn a total of 300.00 from holding STRAYER EDUCATION or generate 3.3% 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. Marks and Spencer
Performance |
| Timeline |
| STRAYER EDUCATION |
| Marks and Spencer |
STRAYER EDUCATION and Marks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Marks
The main advantage of trading using opposite STRAYER EDUCATION and Marks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, Marks 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 Marks will offset losses from the drop in Marks' long position.| STRAYER EDUCATION vs. INTERCONT HOTELS | STRAYER EDUCATION vs. CAIRN HOMES EO | STRAYER EDUCATION vs. Summit Hotel Properties | STRAYER EDUCATION vs. NH HOTEL 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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