Correlation Between Adtalem Global and Scholastic

Can any of the company-specific risk be diversified away by investing in both Adtalem Global and Scholastic 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 Adtalem Global and Scholastic into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adtalem Global Education and Scholastic, you can compare the effects of market volatilities on Adtalem Global and Scholastic 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 Adtalem Global with a short position of Scholastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adtalem Global and Scholastic.

Diversification Opportunities for Adtalem Global and Scholastic

-0.5

Correlation Coefficient

Adtalem Global  Scholastic

Very good diversification

The 3 months correlation between Adtalem and Scholastic is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Adtalem Global Education and Scholastic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scholastic and Adtalem Global 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 Adtalem Global Education are associated (or correlated) with Scholastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scholastic has no effect on the direction of Adtalem Global i.e., Adtalem Global and Scholastic go up and down completely randomly.

Pair Corralation between Adtalem Global and Scholastic

Given the investment horizon of 90 days Adtalem Global is expected to generate 12.18 times less return on investment than Scholastic. But when comparing it to its historical volatility, Adtalem Global Education is 1.49 times less risky than Scholastic. It trades about 0.02 of its potential returns per unit of risk. Scholastic is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,845  in Scholastic on May 5, 2025 and sell it today you would earn a total of  650.00  from holding Scholastic or generate 35.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Adtalem Global Education  vs.  Scholastic

Adtalem Global Education

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Adtalem Global Education are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Adtalem Global is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Scholastic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scholastic are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite uncertain technical indicators, Scholastic disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Adtalem Global and Scholastic

The main advantage of trading using opposite Adtalem Global and Scholastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adtalem Global position performs unexpectedly, Scholastic 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 Scholastic will offset losses from the drop in Scholastic's long position.

The idea behind Adtalem Global Education and Scholastic pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.