Correlation Between Bright Scholar and American Public
Can any of the company-specific risk be diversified away by investing in both Bright Scholar and American Public 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 Bright Scholar and American Public into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Scholar Education and American Public Education, you can compare the effects of market volatilities on Bright Scholar and American Public 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 Bright Scholar with a short position of American Public. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Scholar and American Public.
Diversification Opportunities for Bright Scholar and American Public
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bright and American is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and American Public Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Public Education and Bright Scholar 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 Bright Scholar Education are associated (or correlated) with American Public. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Public Education has no effect on the direction of Bright Scholar i.e., Bright Scholar and American Public go up and down completely randomly.
Pair Corralation between Bright Scholar and American Public
Given the investment horizon of 90 days Bright Scholar Education is expected to under-perform the American Public. In addition to that, Bright Scholar is 2.5 times more volatile than American Public Education. It trades about -0.18 of its total potential returns per unit of risk. American Public Education is currently generating about 0.05 per unit of volatility. If you would invest 2,047 in American Public Education on September 25, 2024 and sell it today you would earn a total of 39.00 from holding American Public Education or generate 1.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Bright Scholar Education vs. American Public Education
Performance |
Timeline |
Bright Scholar Education |
American Public Education |
Bright Scholar and American Public Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bright Scholar and American Public
The main advantage of trading using opposite Bright Scholar and American Public positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Scholar position performs unexpectedly, American Public 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 American Public will offset losses from the drop in American Public's long position.Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon Education |
American Public vs. Laureate Education | American Public vs. Afya | American Public vs. Strategic Education | American Public vs. Stride Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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