Correlation Between STI Education and First Abacus
Can any of the company-specific risk be diversified away by investing in both STI Education and First Abacus 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 STI Education and First Abacus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and First Abacus Financial, you can compare the effects of market volatilities on STI Education and First Abacus 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 STI Education with a short position of First Abacus. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and First Abacus.
Diversification Opportunities for STI Education and First Abacus
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between STI and First is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and First Abacus Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Abacus Financial and STI 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 STI Education Systems are associated (or correlated) with First Abacus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Abacus Financial has no effect on the direction of STI Education i.e., STI Education and First Abacus go up and down completely randomly.
Pair Corralation between STI Education and First Abacus
Assuming the 90 days trading horizon STI Education Systems is expected to generate 0.39 times more return on investment than First Abacus. However, STI Education Systems is 2.55 times less risky than First Abacus. It trades about 0.13 of its potential returns per unit of risk. First Abacus Financial is currently generating about 0.01 per unit of risk. If you would invest 32.00 in STI Education Systems on September 30, 2024 and sell it today you would earn a total of 102.00 from holding STI Education Systems or generate 318.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 15.9% |
| Values | Daily Returns |
STI Education Systems vs. First Abacus Financial
Performance |
| Timeline |
| STI Education Systems |
| First Abacus Financial |
STI Education and First Abacus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and First Abacus
The main advantage of trading using opposite STI Education and First Abacus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education position performs unexpectedly, First Abacus 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 First Abacus will offset losses from the drop in First Abacus' long position.| STI Education vs. DDMP REIT | STI Education vs. Century Pacific Food | STI Education vs. VistaREIT | STI Education vs. Lepanto Consolidated Mining |
| First Abacus vs. VistaREIT | First Abacus vs. Bright Kindle Resources | First Abacus vs. Metro Retail Stores | First Abacus vs. Axelum Resources Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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