Correlation Between Sunlands Technology and Universal Technical
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Universal Technical 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 Universal Technical 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 Universal Technical Institute, you can compare the effects of market volatilities on Sunlands Technology and Universal Technical 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 Universal Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Universal Technical.
Diversification Opportunities for Sunlands Technology and Universal Technical
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunlands and Universal is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Universal Technical Institute in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Technical 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 Universal Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Technical has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Universal Technical go up and down completely randomly.
Pair Corralation between Sunlands Technology and Universal Technical
Considering the 90-day investment horizon Sunlands Technology Group is expected to under-perform the Universal Technical. In addition to that, Sunlands Technology is 1.79 times more volatile than Universal Technical Institute. It trades about 0.0 of its total potential returns per unit of risk. Universal Technical Institute is currently generating about 0.21 per unit of volatility. If you would invest 1,575 in Universal Technical Institute on October 31, 2024 and sell it today you would earn a total of 1,055 from holding Universal Technical Institute or generate 66.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunlands Technology Group vs. Universal Technical Institute
Performance |
| Timeline |
| Sunlands Technology |
| Universal Technical |
Sunlands Technology and Universal Technical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunlands Technology and Universal Technical
The main advantage of trading using opposite Sunlands Technology and Universal Technical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Universal Technical 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 Universal Technical will offset losses from the drop in Universal Technical's long position.| Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. Ihuman Inc | Sunlands Technology vs. Adtalem Global Education |
| Universal Technical vs. Laureate Education | Universal Technical vs. Strategic Education | Universal Technical vs. Grand Canyon Education | Universal Technical 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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