Correlation Between Sunlands Technology and Arco Platform
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Arco Platform 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 Sunlands Technology and Arco Platform into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunlands Technology Group and Arco Platform, you can compare the effects of market volatilities on Sunlands Technology and Arco Platform 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 Sunlands Technology with a short position of Arco Platform. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Arco Platform.
Diversification Opportunities for Sunlands Technology and Arco Platform
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunlands and Arco is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Arco Platform in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arco Platform and Sunlands Technology 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 Sunlands Technology Group are associated (or correlated) with Arco Platform. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arco Platform has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Arco Platform go up and down completely randomly.
Pair Corralation between Sunlands Technology and Arco Platform
Considering the 90-day investment horizon Sunlands Technology Group is expected to generate 6.77 times more return on investment than Arco Platform. However, Sunlands Technology is 6.77 times more volatile than Arco Platform. It trades about 0.05 of its potential returns per unit of risk. Arco Platform is currently generating about 0.36 per unit of risk. If you would invest 379.00 in Sunlands Technology Group on August 28, 2024 and sell it today you would earn a total of 226.00 from holding Sunlands Technology Group or generate 59.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.25% |
| Values | Daily Returns |
Sunlands Technology Group vs. Arco Platform
Performance |
| Timeline |
| Sunlands Technology |
| Arco Platform |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sunlands Technology and Arco Platform Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Arco Platform
The main advantage of trading using opposite Sunlands Technology and Arco Platform positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Arco Platform 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 Arco Platform will offset losses from the drop in Arco Platform's long position.| Sunlands Technology vs. American Public Education | Sunlands Technology vs. Lincoln Educational Services | Sunlands Technology vs. Adtalem Global Education |
| Arco Platform vs. Adtalem Global Education | Arco Platform vs. American Public Education | Arco Platform vs. Laureate Education | Arco Platform vs. Grand Canyon Education |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |