Correlation Between Aspen and Sunlands Technology

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

By analyzing existing cross correlation between Aspen Group and Sunlands Technology Group, you can compare the effects of market volatilities on Aspen and Sunlands Technology 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 Sunlands Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen and Sunlands Technology.

Diversification Opportunities for Aspen and Sunlands Technology

0.0

Correlation Coefficient

Aspen  Sunlands Technology

Pay attention - limited upside

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

Pair Corralation between Aspen and Sunlands Technology

If you would invest (100.00) in Aspen Group on December 27, 2024 and sell it today you would earn a total of  100.00  from holding Aspen Group or generate -100.0% return on investment over 90 days.

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

Aspen Group  vs.  Sunlands Technology Group

Aspen Group

Risk-Adjusted Performance

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.

Sunlands Technology

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Aspen and Sunlands Technology

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

The idea behind Aspen Group and Sunlands Technology Group 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.