Correlation Between Bright Scholar and Stride

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

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

Diversification Opportunities for Bright Scholar and Stride

-0.51

Correlation Coefficient

Bright Scholar  Stride

Excellent diversification

The 3 months correlation between Bright and Stride is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Bright Scholar Education and Stride Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stride Inc and Bright Scholar 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 Bright Scholar Education are associated (or correlated) with Stride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stride Inc has no effect on the direction of Bright Scholar i.e., Bright Scholar and Stride go up and down completely randomly.

Pair Corralation between Bright Scholar and Stride

Given the investment horizon of 90 days Bright Scholar is expected to generate 1.44 times less return on investment than Stride. In addition to that, Bright Scholar is 1.97 times more volatile than Stride Inc. It trades about 0.04 of its total potential returns per unit of risk. Stride Inc is currently generating about 0.1 per unit of volatility. If you would invest  4,010  in Stride Inc on September 19, 2024 and sell it today you would earn a total of  6,750  from holding Stride Inc or generate 168.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.98%
Values	Daily Returns

Bright Scholar Education  vs.  Stride Inc

Bright Scholar Education

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bright Scholar Education are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental indicators, Bright Scholar is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Stride Inc

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stride Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Stride displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bright Scholar and Stride

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

The idea behind Bright Scholar Education and Stride Inc 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.