Correlation Between Strategic Education and Gentex
Can any of the company-specific risk be diversified away by investing in both Strategic Education and Gentex 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 Strategic Education and Gentex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and Gentex, you can compare the effects of market volatilities on Strategic Education and Gentex 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 Strategic Education with a short position of Gentex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and Gentex.
Diversification Opportunities for Strategic Education and Gentex
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Strategic and Gentex is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex and Strategic 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 Strategic Education are associated (or correlated) with Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Strategic Education i.e., Strategic Education and Gentex go up and down completely randomly.
Pair Corralation between Strategic Education and Gentex
Assuming the 90 days horizon Strategic Education is expected to generate 0.4 times more return on investment than Gentex. However, Strategic Education is 2.5 times less risky than Gentex. It trades about 0.25 of its potential returns per unit of risk. Gentex is currently generating about -0.02 per unit of risk. If you would invest 8,900 in Strategic Education on November 7, 2024 and sell it today you would earn a total of 550.00 from holding Strategic Education or generate 6.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Education vs. Gentex
Performance |
| Timeline |
| Strategic Education |
| Gentex |
Strategic Education and Gentex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Education and Gentex
The main advantage of trading using opposite Strategic Education and Gentex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education position performs unexpectedly, Gentex 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 Gentex will offset losses from the drop in Gentex's long position.| Strategic Education vs. MACOM Technology Solutions | Strategic Education vs. Commercial Vehicle Group | Strategic Education vs. Kingdee International Software | Strategic Education vs. GEELY AUTOMOBILE |
| Gentex vs. Keck Seng Investments | Gentex vs. Hitachi Construction Machinery | Gentex vs. Dairy Farm International | Gentex vs. North American Construction |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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