Correlation Between EMBARK EDUCATION and China Reinsurance

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

By analyzing existing cross correlation between EMBARK EDUCATION LTD and China Reinsurance Corp, you can compare the effects of market volatilities on EMBARK EDUCATION and China Reinsurance 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 EMBARK EDUCATION with a short position of China Reinsurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and China Reinsurance.

Diversification Opportunities for EMBARK EDUCATION and China Reinsurance

0.0

Correlation Coefficient

EMBARK EDUCATION  China Reinsurance

Pay attention - limited upside

The 3 months correlation between EMBARK and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD and China Reinsurance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Reinsurance Corp and EMBARK 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 EMBARK EDUCATION LTD are associated (or correlated) with China Reinsurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Reinsurance Corp has no effect on the direction of EMBARK EDUCATION i.e., EMBARK EDUCATION and China Reinsurance go up and down completely randomly.

Pair Corralation between EMBARK EDUCATION and China Reinsurance

If you would invest  31.00  in EMBARK EDUCATION LTD on December 22, 2024 and sell it today you would earn a total of  0.00  from holding EMBARK EDUCATION LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

EMBARK EDUCATION LTD  vs.  China Reinsurance Corp

EMBARK EDUCATION LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days EMBARK EDUCATION LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, EMBARK EDUCATION is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

China Reinsurance Corp

Risk-Adjusted Performance

OK

Over the last 90 days China Reinsurance Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, China Reinsurance is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with EMBARK EDUCATION and China Reinsurance

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

The idea behind EMBARK EDUCATION LTD and China Reinsurance Corp 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.