Correlation Between Aspen and Adtalem Global

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

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

Diversification Opportunities for Aspen and Adtalem Global

-0.8

Correlation Coefficient

Aspen  Adtalem Global

Pay attention - limited upside

The 3 months correlation between Aspen and Adtalem is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Group and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education and Aspen 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 Aspen Group are associated (or correlated) with Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of Aspen i.e., Aspen and Adtalem Global go up and down completely randomly.

Pair Corralation between Aspen and Adtalem Global

If you would invest  7,357  in Adtalem Global Education on September 18, 2024 and sell it today you would earn a total of  1,790  from holding Adtalem Global Education or generate 24.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Aspen Group  vs.  Adtalem Global Education

Aspen Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Adtalem Global Education

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adtalem Global Education are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Adtalem Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Aspen and Adtalem Global

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

The idea behind Aspen Group and Adtalem Global 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.