Correlation Between STRAYER EDUCATION and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both STRAYER EDUCATION and Sunny Optical 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 Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STRAYER EDUCATION and Sunny Optical Technology, you can compare the effects of market volatilities on STRAYER EDUCATION and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Sunny Optical.
Diversification Opportunities for STRAYER EDUCATION and Sunny Optical
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STRAYER and Sunny is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Sunny Optical go up and down completely randomly.
Pair Corralation between STRAYER EDUCATION and Sunny Optical
Assuming the 90 days trading horizon STRAYER EDUCATION is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, STRAYER EDUCATION is 1.95 times less risky than Sunny Optical. The stock trades about -0.14 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 791.00 in Sunny Optical Technology on October 13, 2024 and sell it today you would lose (33.00) from holding Sunny Optical Technology or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STRAYER EDUCATION vs. Sunny Optical Technology
Performance |
| Timeline |
| STRAYER EDUCATION |
| Sunny Optical Technology |
STRAYER EDUCATION and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STRAYER EDUCATION and Sunny Optical
The main advantage of trading using opposite STRAYER EDUCATION and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STRAYER EDUCATION position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| STRAYER EDUCATION vs. SAFEROADS HLDGS | STRAYER EDUCATION vs. TITANIUM TRANSPORTGROUP | STRAYER EDUCATION vs. Texas Roadhouse | STRAYER EDUCATION vs. TRAINLINE PLC LS |
| Sunny Optical vs. INDOFOOD AGRI RES | Sunny Optical vs. Datadog | Sunny Optical vs. DATATEC LTD 2 | Sunny Optical vs. Thai Beverage Public |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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