Correlation Between New Oriental and Coursera

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

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

Diversification Opportunities for New Oriental and Coursera

0.38

Correlation Coefficient

New Oriental  Coursera

Weak diversification

The 3 months correlation between New and Coursera is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding New Oriental Education and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera and New Oriental 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 New Oriental Education are associated (or correlated) with Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of New Oriental i.e., New Oriental and Coursera go up and down completely randomly.

Pair Corralation between New Oriental and Coursera

Considering the 90-day investment horizon New Oriental Education is expected to under-perform the Coursera. In addition to that, New Oriental is 1.24 times more volatile than Coursera. It trades about -0.08 of its total potential returns per unit of risk. Coursera is currently generating about -0.07 per unit of volatility. If you would invest  849.00  in Coursera on December 25, 2024 and sell it today you would lose (136.00) from holding Coursera or give up 16.02% of portfolio value over 90 days.

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

New Oriental Education  vs.  Coursera

New Oriental Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days New Oriental 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 fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Coursera

Risk-Adjusted Performance

Very Weak

Over the last 90 days Coursera has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with New Oriental and Coursera

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

The idea behind New Oriental Education and Coursera 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .