Correlation Between Lixiang Education and Ambow Education
Can any of the company-specific risk be diversified away by investing in both Lixiang Education and Ambow Education 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 Ambow Education 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 Ambow Education Holding, you can compare the effects of market volatilities on Lixiang Education and Ambow Education 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 Ambow Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lixiang Education and Ambow Education.
Diversification Opportunities for Lixiang Education and Ambow Education
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lixiang and Ambow is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Lixiang Education Holding and Ambow Education Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambow Education Holding 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 Ambow Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambow Education Holding has no effect on the direction of Lixiang Education i.e., Lixiang Education and Ambow Education go up and down completely randomly.
Pair Corralation between Lixiang Education and Ambow Education
Given the investment horizon of 90 days Lixiang Education Holding is expected to generate 1.22 times more return on investment than Ambow Education. However, Lixiang Education is 1.22 times more volatile than Ambow Education Holding. It trades about 0.41 of its potential returns per unit of risk. Ambow Education Holding is currently generating about 0.05 per unit of risk. If you would invest 240.00 in Lixiang Education Holding on September 26, 2024 and sell it today you would earn a total of 287.00 from holding Lixiang Education Holding or generate 119.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Lixiang Education Holding vs. Ambow Education Holding
Performance |
Timeline |
Lixiang Education Holding |
Ambow Education Holding |
Lixiang Education and Ambow Education Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Lixiang Education and Ambow Education
The main advantage of trading using opposite Lixiang Education and Ambow Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lixiang Education position performs unexpectedly, Ambow Education 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 Ambow Education will offset losses from the drop in Ambow Education'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 |
Ambow Education vs. Vasta Platform | Ambow Education vs. Sunlands Technology Group | Ambow Education vs. Cogna Educacao SA | Ambow Education vs. American Public 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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