Correlation Between Lixiang Education and ATA Creativity
Can any of the company-specific risk be diversified away by investing in both Lixiang Education 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 Lixiang Education and ATA Creativity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lixiang Education Holding and ATA Creativity Global, you can compare the effects of market volatilities on Lixiang Education 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 Lixiang Education with a short position of ATA Creativity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixiang Education and ATA Creativity.
Diversification Opportunities for Lixiang Education and ATA Creativity
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lixiang and ATA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lixiang Education Holding 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 Lixiang 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 Lixiang Education Holding 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 Lixiang Education i.e., Lixiang Education and ATA Creativity go up and down completely randomly.
Pair Corralation between Lixiang Education and ATA Creativity
Given the investment horizon of 90 days Lixiang Education Holding is expected to generate 2.23 times more return on investment than ATA Creativity. However, Lixiang Education is 2.23 times more volatile than ATA Creativity Global. It trades about 0.02 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 5,800 in Lixiang Education Holding on September 26, 2024 and sell it today you would lose (5,273) from holding Lixiang Education Holding or give up 90.91% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lixiang Education Holding vs. ATA Creativity Global
Performance |
Timeline |
Lixiang Education Holding |
ATA Creativity Global |
Lixiang Education and ATA Creativity Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lixiang Education and ATA Creativity
The main advantage of trading using opposite Lixiang Education and ATA Creativity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixiang Education 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.Lixiang Education vs. China Liberal Education | Lixiang Education vs. Four Seasons Education | Lixiang Education vs. Jianzhi Education Technology | Lixiang Education vs. Elite Education Group |
ATA Creativity vs. Lixiang Education Holding | ATA Creativity vs. Jianzhi Education Technology | ATA Creativity vs. Golden Sun Education |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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