Correlation Between CAREER EDUCATION and FRASERS PROPERTY

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

By analyzing existing cross correlation between CAREER EDUCATION and FRASERS PROPERTY, you can compare the effects of market volatilities on CAREER EDUCATION and FRASERS PROPERTY 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 CAREER EDUCATION with a short position of FRASERS PROPERTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAREER EDUCATION and FRASERS PROPERTY.

Diversification Opportunities for CAREER EDUCATION and FRASERS PROPERTY

0.64

Correlation Coefficient

CAREER EDUCATION  FRASERS PROPERTY

Poor diversification

The 3 months correlation between CAREER and FRASERS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding CAREER EDUCATION and FRASERS PROPERTY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FRASERS PROPERTY and CAREER 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 CAREER EDUCATION are associated (or correlated) with FRASERS PROPERTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FRASERS PROPERTY has no effect on the direction of CAREER EDUCATION i.e., CAREER EDUCATION and FRASERS PROPERTY go up and down completely randomly.

Pair Corralation between CAREER EDUCATION and FRASERS PROPERTY

Assuming the 90 days trading horizon CAREER EDUCATION is expected to generate 1.62 times more return on investment than FRASERS PROPERTY. However, CAREER EDUCATION is 1.62 times more volatile than FRASERS PROPERTY. It trades about 0.19 of its potential returns per unit of risk. FRASERS PROPERTY is currently generating about 0.09 per unit of risk. If you would invest  1,900  in CAREER EDUCATION on October 12, 2024 and sell it today you would earn a total of  640.00  from holding CAREER EDUCATION or generate 33.68% return on investment over 90 days.

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

CAREER EDUCATION  vs.  FRASERS PROPERTY

CAREER EDUCATION

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CAREER EDUCATION are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, CAREER EDUCATION exhibited solid returns over the last few months and may actually be approaching a breakup point.

FRASERS PROPERTY

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FRASERS PROPERTY are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FRASERS PROPERTY may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CAREER EDUCATION and FRASERS PROPERTY

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

The idea behind CAREER EDUCATION and FRASERS PROPERTY 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.