Correlation Between ATA Creativity and Golden Sun

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

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

Diversification Opportunities for ATA Creativity and Golden Sun

-0.79

Correlation Coefficient

ATA Creativity  Golden Sun

Pay attention - limited upside

The 3 months correlation between ATA and Golden is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding ATA Creativity Global and Golden Sun Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Sun Education and ATA Creativity 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 ATA Creativity Global are associated (or correlated) with Golden Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Sun Education has no effect on the direction of ATA Creativity i.e., ATA Creativity and Golden Sun go up and down completely randomly.

Pair Corralation between ATA Creativity and Golden Sun

Given the investment horizon of 90 days ATA Creativity Global is expected to under-perform the Golden Sun. But the stock apears to be less risky and, when comparing its historical volatility, ATA Creativity Global is 1.56 times less risky than Golden Sun. The stock trades about -0.27 of its potential returns per unit of risk. The Golden Sun Education is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  289.00  in Golden Sun Education on September 22, 2024 and sell it today you would lose (18.00) from holding Golden Sun Education or give up 6.23% of portfolio value over 90 days.

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

ATA Creativity Global  vs.  Golden Sun Education

ATA Creativity Global

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ATA Creativity Global are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain fundamental indicators, ATA Creativity reported solid returns over the last few months and may actually be approaching a breakup point.

Golden Sun Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Sun Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ATA Creativity and Golden Sun

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

The idea behind ATA Creativity Global and Golden Sun Education 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.