Correlation Between Sunlands Technology and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on Sunlands Technology and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Strategic Education.
Diversification Opportunities for Sunlands Technology and Strategic Education
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunlands and Strategic is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Strategic Education go up and down completely randomly.
Pair Corralation between Sunlands Technology and Strategic Education
Considering the 90-day investment horizon Sunlands Technology Group is expected to under-perform the Strategic Education. In addition to that, Sunlands Technology is 1.38 times more volatile than Strategic Education. It trades about -0.11 of its total potential returns per unit of risk. Strategic Education is currently generating about 0.29 per unit of volatility. If you would invest 8,674 in Strategic Education on August 27, 2024 and sell it today you would earn a total of 1,266 from holding Strategic Education or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunlands Technology Group vs. Strategic Education
Performance |
| Timeline |
| Sunlands Technology |
| Strategic Education |
Sunlands Technology and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Strategic Education
The main advantage of trading using opposite Sunlands Technology and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Sunlands Technology vs. American Public Education | Sunlands Technology vs. Lincoln Educational Services | Sunlands Technology vs. Adtalem Global Education |
| Strategic Education vs. Element Solutions | Strategic Education vs. DoubleVerify Holdings | Strategic Education vs. CECO Environmental Corp | Strategic Education vs. American Public 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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