Correlation Between Strategic Education and Stride
Can any of the company-specific risk be diversified away by investing in both Strategic Education and Stride 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 Strategic Education and Stride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and Stride Inc, you can compare the effects of market volatilities on Strategic Education and Stride 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 Strategic Education with a short position of Stride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and Stride.
Diversification Opportunities for Strategic Education and Stride
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Strategic and Stride is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Stride Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stride Inc and Strategic 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 Strategic Education are associated (or correlated) with Stride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stride Inc has no effect on the direction of Strategic Education i.e., Strategic Education and Stride go up and down completely randomly.
Pair Corralation between Strategic Education and Stride
Given the investment horizon of 90 days Strategic Education is expected to under-perform the Stride. But the stock apears to be less risky and, when comparing its historical volatility, Strategic Education is 1.58 times less risky than Stride. The stock trades about -0.01 of its potential returns per unit of risk. The Stride Inc is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 5,975 in Stride Inc on August 27, 2024 and sell it today you would earn a total of 4,420 from holding Stride Inc or generate 73.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Education vs. Stride Inc
Performance |
| Timeline |
| Strategic Education |
| Stride Inc |
Strategic Education and Stride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Education and Stride
The main advantage of trading using opposite Strategic Education and Stride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education position performs unexpectedly, Stride 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 Stride will offset losses from the drop in Stride's long position.| Strategic Education vs. American Public Education | Strategic Education vs. Lincoln Educational Services | Strategic Education vs. Adtalem Global Education |
| Stride vs. Laureate Education | Stride vs. American Public Education | Stride vs. Lincoln Educational Services | Stride 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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