Correlation Between Golden Sun and Lincoln Educational
Can any of the company-specific risk be diversified away by investing in both Golden Sun and Lincoln Educational 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 Lincoln Educational 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 Lincoln Educational Services, you can compare the effects of market volatilities on Golden Sun and Lincoln Educational 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 Lincoln Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Sun and Lincoln Educational.
Diversification Opportunities for Golden Sun and Lincoln Educational
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Golden and Lincoln is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and Lincoln Educational Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lincoln Educational 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 Lincoln Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lincoln Educational has no effect on the direction of Golden Sun i.e., Golden Sun and Lincoln Educational go up and down completely randomly.
Pair Corralation between Golden Sun and Lincoln Educational
Given the investment horizon of 90 days Golden Sun Education is expected to generate 2.36 times more return on investment than Lincoln Educational. However, Golden Sun is 2.36 times more volatile than Lincoln Educational Services. It trades about -0.05 of its potential returns per unit of risk. Lincoln Educational Services is currently generating about -0.17 per unit of risk. If you would invest 298.00 in Golden Sun Education on September 26, 2024 and sell it today you would lose (19.00) from holding Golden Sun Education or give up 6.38% 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. Lincoln Educational Services
Performance |
Timeline |
Golden Sun Education |
Lincoln Educational |
Golden Sun and Lincoln Educational Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Golden Sun and Lincoln Educational
The main advantage of trading using opposite Golden Sun and Lincoln Educational positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Sun position performs unexpectedly, Lincoln Educational 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 Lincoln Educational will offset losses from the drop in Lincoln Educational's long position.Golden Sun vs. Wah Fu Education | Golden Sun vs. QuantaSing Group Limited | Golden Sun vs. Genius Group | Golden Sun vs. China Liberal Education |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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