Correlation Between Sunlands Technology and Four Seasons
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Four Seasons 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 Four Seasons 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 Four Seasons Education, you can compare the effects of market volatilities on Sunlands Technology and Four Seasons 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 Four Seasons. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Four Seasons.
Diversification Opportunities for Sunlands Technology and Four Seasons
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunlands and Four is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Four Seasons Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Seasons Education 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 Four Seasons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Seasons Education has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Four Seasons go up and down completely randomly.
Pair Corralation between Sunlands Technology and Four Seasons
Considering the 90-day investment horizon Sunlands Technology Group is expected to under-perform the Four Seasons. In addition to that, Sunlands Technology is 1.8 times more volatile than Four Seasons Education. It trades about -0.19 of its total potential returns per unit of risk. Four Seasons Education is currently generating about -0.24 per unit of volatility. If you would invest 1,209 in Four Seasons Education on August 27, 2024 and sell it today you would lose (118.00) from holding Four Seasons Education or give up 9.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunlands Technology Group vs. Four Seasons Education
Performance |
| Timeline |
| Sunlands Technology |
| Four Seasons Education |
Sunlands Technology and Four Seasons Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Four Seasons
The main advantage of trading using opposite Sunlands Technology and Four Seasons positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Four Seasons 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 Four Seasons will offset losses from the drop in Four Seasons' long position.| Sunlands Technology vs. American Public Education | Sunlands Technology vs. Lincoln Educational Services | Sunlands Technology vs. Adtalem Global Education |
| Four Seasons vs. American Public Education | Four Seasons vs. Lincoln Educational Services | Four Seasons vs. Adtalem Global 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |