Correlation Between Jianzhi Education and Bright Scholar

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

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

Diversification Opportunities for Jianzhi Education and Bright Scholar

0.15

Correlation Coefficient

Jianzhi Education  Bright Scholar

Average diversification

The 3 months correlation between Jianzhi and Bright is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Jianzhi Education Technology and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education and Jianzhi 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 Jianzhi Education Technology are associated (or correlated) with Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Jianzhi Education i.e., Jianzhi Education and Bright Scholar go up and down completely randomly.

Pair Corralation between Jianzhi Education and Bright Scholar

Allowing for the 90-day total investment horizon Jianzhi Education Technology is expected to under-perform the Bright Scholar. In addition to that, Jianzhi Education is 1.07 times more volatile than Bright Scholar Education. It trades about -0.03 of its total potential returns per unit of risk. Bright Scholar Education is currently generating about 0.05 per unit of volatility. If you would invest  114.00  in Bright Scholar Education on September 27, 2024 and sell it today you would earn a total of  41.00  from holding Bright Scholar Education or generate 35.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.51%
Values	Daily Returns

Jianzhi Education Technology  vs.  Bright Scholar Education

Jianzhi Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jianzhi Education Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Bright Scholar Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Bright Scholar Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Jianzhi Education and Bright Scholar

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

The idea behind Jianzhi Education Technology and Bright Scholar Education 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.