Correlation Between Salzgitter and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Salzgitter and Strategic 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 Salzgitter and Strategic Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salzgitter AG and Strategic Education, you can compare the effects of market volatilities on Salzgitter and Strategic 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 Salzgitter with a short position of Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salzgitter and Strategic Education.
Diversification Opportunities for Salzgitter and Strategic Education
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Salzgitter and Strategic is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Salzgitter AG and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education and Salzgitter 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 Salzgitter AG are associated (or correlated) with Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Salzgitter i.e., Salzgitter and Strategic Education go up and down completely randomly.
Pair Corralation between Salzgitter and Strategic Education
Assuming the 90 days trading horizon Salzgitter is expected to generate 1.21 times less return on investment than Strategic Education. In addition to that, Salzgitter is 2.52 times more volatile than Strategic Education. It trades about 0.12 of its total potential returns per unit of risk. Strategic Education is currently generating about 0.36 per unit of volatility. If you would invest 8,850 in Strategic Education on October 24, 2024 and sell it today you would earn a total of 500.00 from holding Strategic Education or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salzgitter AG vs. Strategic Education
Performance |
| Timeline |
| Salzgitter AG |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
| Strategic Education |
Salzgitter and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salzgitter and Strategic Education
The main advantage of trading using opposite Salzgitter and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salzgitter position performs unexpectedly, Strategic 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Salzgitter vs. Elmos Semiconductor SE | Salzgitter vs. Tencent Music Entertainment | Salzgitter vs. JD SPORTS FASH | Salzgitter vs. BII Railway Transportation |
| Strategic Education vs. Electronic Arts | Strategic Education vs. ANGLO ASIAN MINING | Strategic Education vs. Nucletron Electronic Aktiengesellschaft | Strategic Education vs. NorAm Drilling AS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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