Correlation Between Sunny Optical and STRAYER EDUCATION
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and STRAYER 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 Sunny Optical and STRAYER EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and STRAYER EDUCATION, you can compare the effects of market volatilities on Sunny Optical and STRAYER 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 Sunny Optical with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and STRAYER EDUCATION.
Diversification Opportunities for Sunny Optical and STRAYER EDUCATION
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and STRAYER is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and Sunny Optical 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 Sunny Optical Technology are associated (or correlated) with STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Sunny Optical i.e., Sunny Optical and STRAYER EDUCATION go up and down completely randomly.
Pair Corralation between Sunny Optical and STRAYER EDUCATION
Assuming the 90 days horizon Sunny Optical is expected to generate 16.54 times less return on investment than STRAYER EDUCATION. In addition to that, Sunny Optical is 1.75 times more volatile than STRAYER EDUCATION. It trades about 0.0 of its total potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.03 per unit of volatility. If you would invest 7,422 in STRAYER EDUCATION on October 13, 2024 and sell it today you would earn a total of 1,528 from holding STRAYER EDUCATION or generate 20.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. STRAYER EDUCATION
Performance |
| Timeline |
| Sunny Optical Technology |
| STRAYER EDUCATION |
Sunny Optical and STRAYER EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and STRAYER EDUCATION
The main advantage of trading using opposite Sunny Optical and STRAYER EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, STRAYER 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 STRAYER EDUCATION will offset losses from the drop in STRAYER EDUCATION's long position.| Sunny Optical vs. INDOFOOD AGRI RES | Sunny Optical vs. Datadog | Sunny Optical vs. DATATEC LTD 2 | Sunny Optical vs. Thai Beverage Public |
| STRAYER EDUCATION vs. SAFEROADS HLDGS | STRAYER EDUCATION vs. TITANIUM TRANSPORTGROUP | STRAYER EDUCATION vs. Texas Roadhouse | STRAYER EDUCATION vs. TRAINLINE PLC LS |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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