Correlation Between Strategic Education and Wah Fu
Can any of the company-specific risk be diversified away by investing in both Strategic Education and Wah Fu 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 Wah Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and Wah Fu Education, you can compare the effects of market volatilities on Strategic Education and Wah Fu 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 Wah Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and Wah Fu.
Diversification Opportunities for Strategic Education and Wah Fu
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Strategic and Wah is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Wah Fu Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Fu Education 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 Wah Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Fu Education has no effect on the direction of Strategic Education i.e., Strategic Education and Wah Fu go up and down completely randomly.
Pair Corralation between Strategic Education and Wah Fu
Given the investment horizon of 90 days Strategic Education is expected to generate 0.36 times more return on investment than Wah Fu. However, Strategic Education is 2.78 times less risky than Wah Fu. It trades about 0.09 of its potential returns per unit of risk. Wah Fu Education is currently generating about -0.15 per unit of risk. If you would invest 9,738 in Strategic Education on September 12, 2024 and sell it today you would earn a total of 198.00 from holding Strategic Education or generate 2.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Education vs. Wah Fu Education
Performance |
| Timeline |
| Strategic Education |
| Wah Fu Education |
Strategic Education and Wah Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Education and Wah Fu
The main advantage of trading using opposite Strategic Education and Wah Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education position performs unexpectedly, Wah Fu 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 Wah Fu will offset losses from the drop in Wah Fu's long position.| Strategic Education vs. Element Solutions | Strategic Education vs. DoubleVerify Holdings | Strategic Education vs. CECO Environmental Corp | Strategic Education vs. American Public Education |
| Wah Fu vs. Four Seasons Education | Wah Fu vs. Sunlands Technology Group | Wah Fu vs. 51Talk Online Education | Wah Fu vs. Golden Sun 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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