Correlation Between ITT Educational and Exceed World

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

By analyzing existing cross correlation between ITT Educational Services and Exceed World, you can compare the effects of market volatilities on ITT Educational and Exceed World 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 ITT Educational with a short position of Exceed World. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITT Educational and Exceed World.

Diversification Opportunities for ITT Educational and Exceed World

0.0

Correlation Coefficient

ITT Educational  Exceed World

Pay attention - limited upside

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

Pair Corralation between ITT Educational and Exceed World

If you would invest  82.00  in Exceed World on September 20, 2024 and sell it today you would lose (32.00) from holding Exceed World or give up 39.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.45%
Values	Daily Returns

ITT Educational Services  vs.  Exceed World

ITT Educational Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ITT Educational Services has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, ITT Educational is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Exceed World

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Exceed World are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, Exceed World showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ITT Educational and Exceed World

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

The idea behind ITT Educational Services and Exceed World 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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.