Correlation Between Golden Sun and ATA Creativity

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

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

Diversification Opportunities for Golden Sun and ATA Creativity

-0.74

Correlation Coefficient

Golden Sun  ATA Creativity

Pay attention - limited upside

The 3 months correlation between Golden and ATA is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and ATA Creativity Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATA Creativity Global and Golden Sun 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 Golden Sun Education are associated (or correlated) with ATA Creativity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATA Creativity Global has no effect on the direction of Golden Sun i.e., Golden Sun and ATA Creativity go up and down completely randomly.

Pair Corralation between Golden Sun and ATA Creativity

Given the investment horizon of 90 days Golden Sun Education is expected to generate 2.31 times more return on investment than ATA Creativity. However, Golden Sun is 2.31 times more volatile than ATA Creativity Global. It trades about 0.01 of its potential returns per unit of risk. ATA Creativity Global is currently generating about 0.0 per unit of risk. If you would invest  1,260  in Golden Sun Education on September 26, 2024 and sell it today you would lose (981.00) from holding Golden Sun Education or give up 77.86% of portfolio value over 90 days.

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

Golden Sun Education  vs.  ATA Creativity Global

Golden Sun Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Sun 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 basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

ATA Creativity Global

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ATA Creativity Global are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent fundamental indicators, ATA Creativity reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Golden Sun and ATA Creativity

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

The idea behind Golden Sun Education and ATA Creativity Global 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.