Correlation Between Corporate Office and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Corporate Office and CHINA 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 Corporate Office and CHINA EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporate Office Properties and CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Corporate Office and CHINA 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 Corporate Office with a short position of CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporate Office and CHINA EDUCATION.
Diversification Opportunities for Corporate Office and CHINA EDUCATION
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporate and CHINA is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Corporate Office Properties and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP and Corporate Office 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 Corporate Office Properties are associated (or correlated) with CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Corporate Office i.e., Corporate Office and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Corporate Office and CHINA EDUCATION
Assuming the 90 days horizon Corporate Office Properties is expected to generate 0.34 times more return on investment than CHINA EDUCATION. However, Corporate Office Properties is 2.93 times less risky than CHINA EDUCATION. It trades about 0.07 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about -0.24 per unit of risk. If you would invest 2,980 in Corporate Office Properties on August 29, 2024 and sell it today you would earn a total of 60.00 from holding Corporate Office Properties or generate 2.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Corporate Office Properties vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Corporate Office Pro |
| CHINA EDUCATION GROUP |
Corporate Office and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporate Office and CHINA EDUCATION
The main advantage of trading using opposite Corporate Office and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporate Office position performs unexpectedly, CHINA 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Corporate Office vs. Superior Plus Corp | Corporate Office vs. NMI Holdings | Corporate Office vs. Origin Agritech | Corporate Office vs. SIVERS SEMICONDUCTORS AB |
| CHINA EDUCATION vs. Choice Hotels International | CHINA EDUCATION vs. Wyndham Hotels Resorts | CHINA EDUCATION vs. FIREWEED METALS P | CHINA EDUCATION vs. PARKEN Sport Entertainment |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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