Correlation Between EMBARK EDUCATION and OAKTRSPECLENDNEW

Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW, you can compare the effects of market volatilities on EMBARK EDUCATION and OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and OAKTRSPECLENDNEW.

Diversification Opportunities for EMBARK EDUCATION and OAKTRSPECLENDNEW

-0.18

Correlation Coefficient

EMBARK EDUCATION  OAKTRSPECLENDNEW

Good diversification

The 3 months correlation between EMBARK and OAKTRSPECLENDNEW is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD and OAKTRSPECLENDNEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OAKTRSPECLENDNEW 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 OAKTRSPECLENDNEW. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OAKTRSPECLENDNEW has no effect on the direction of EMBARK EDUCATION i.e., EMBARK EDUCATION and OAKTRSPECLENDNEW go up and down completely randomly.

Pair Corralation between EMBARK EDUCATION and OAKTRSPECLENDNEW

Assuming the 90 days horizon EMBARK EDUCATION is expected to generate 22.94 times less return on investment than OAKTRSPECLENDNEW. But when comparing it to its historical volatility, EMBARK EDUCATION LTD is 1.94 times less risky than OAKTRSPECLENDNEW. It trades about 0.0 of its potential returns per unit of risk. OAKTRSPECLENDNEW is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,411  in OAKTRSPECLENDNEW on December 26, 2024 and sell it today you would earn a total of  30.00  from holding OAKTRSPECLENDNEW or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

EMBARK EDUCATION LTD  vs.  OAKTRSPECLENDNEW

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

OAKTRSPECLENDNEW

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in OAKTRSPECLENDNEW are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, OAKTRSPECLENDNEW is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with EMBARK EDUCATION and OAKTRSPECLENDNEW

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

The idea behind EMBARK EDUCATION LTD and OAKTRSPECLENDNEW 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.