Correlation Between Wah Fu and Adtalem Global
Can any of the company-specific risk be diversified away by investing in both Wah Fu and Adtalem Global 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 Wah Fu and Adtalem Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wah Fu Education and Adtalem Global Education, you can compare the effects of market volatilities on Wah Fu and Adtalem Global 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 Wah Fu with a short position of Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wah Fu and Adtalem Global.
Diversification Opportunities for Wah Fu and Adtalem Global
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wah and Adtalem is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wah Fu Education and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education and Wah Fu 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 Wah Fu Education are associated (or correlated) with Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of Wah Fu i.e., Wah Fu and Adtalem Global go up and down completely randomly.
Pair Corralation between Wah Fu and Adtalem Global
Given the investment horizon of 90 days Wah Fu is expected to generate 1.92 times less return on investment than Adtalem Global. In addition to that, Wah Fu is 1.99 times more volatile than Adtalem Global Education. It trades about 0.05 of its total potential returns per unit of risk. Adtalem Global Education is currently generating about 0.18 per unit of volatility. If you would invest 8,734 in Adtalem Global Education on October 19, 2024 and sell it today you would earn a total of 1,083 from holding Adtalem Global Education or generate 12.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wah Fu Education vs. Adtalem Global Education
Performance |
| Timeline |
| Wah Fu Education |
| Adtalem Global Education |
Wah Fu and Adtalem Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wah Fu and Adtalem Global
The main advantage of trading using opposite Wah Fu and Adtalem Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wah Fu position performs unexpectedly, Adtalem Global 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 Adtalem Global will offset losses from the drop in Adtalem Global's long position.| Wah Fu vs. Four Seasons Education | Wah Fu vs. Sunlands Technology Group | Wah Fu vs. 51Talk Online Education | Wah Fu vs. Golden Sun Education |
| Adtalem Global vs. Grand Canyon Education | Adtalem Global vs. Afya | Adtalem Global vs. Bright Scholar Education | Adtalem Global vs. Laureate 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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