Correlation Between Legacy Education and WeRide American

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

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

Diversification Opportunities for Legacy Education and WeRide American

0.45

Correlation Coefficient

Legacy Education  WeRide American

Very weak diversification

The 3 months correlation between Legacy and WeRide is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Legacy Education Alliance and WeRide American Depositary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WeRide American Depo and Legacy Education 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 Legacy Education Alliance are associated (or correlated) with WeRide American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WeRide American Depo has no effect on the direction of Legacy Education i.e., Legacy Education and WeRide American go up and down completely randomly.

Pair Corralation between Legacy Education and WeRide American

Given the investment horizon of 90 days Legacy Education Alliance is expected to under-perform the WeRide American. In addition to that, Legacy Education is 1.46 times more volatile than WeRide American Depositary. It trades about -0.01 of its total potential returns per unit of risk. WeRide American Depositary is currently generating about 0.01 per unit of volatility. If you would invest  1,655  in WeRide American Depositary on June 12, 2025 and sell it today you would lose (721.00) from holding WeRide American Depositary or give up 43.56% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	47.29%
Values	Daily Returns

Legacy Education Alliance  vs.  WeRide American Depositary

Legacy Education Alliance

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Legacy Education Alliance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Legacy Education demonstrated solid returns over the last few months and may actually be approaching a breakup point.

WeRide American Depo

Risk-Adjusted Performance

Soft

Compared to the overall equity markets, risk-adjusted returns on investments in WeRide American Depositary are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, WeRide American exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Legacy Education and WeRide American

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

The idea behind Legacy Education Alliance and WeRide American Depositary 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.

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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.