Correlation Between Shyft and Perdoceo Education

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

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

Diversification Opportunities for Shyft and Perdoceo Education

0.1

Correlation Coefficient

Shyft  Perdoceo Education

Average diversification

The 3 months correlation between Shyft and Perdoceo is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding The Shyft Group and Perdoceo Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perdoceo Education and Shyft 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 The Shyft Group are associated (or correlated) with Perdoceo Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perdoceo Education has no effect on the direction of Shyft i.e., Shyft and Perdoceo Education go up and down completely randomly.

Pair Corralation between Shyft and Perdoceo Education

Assuming the 90 days horizon The Shyft Group is expected to generate 3.49 times more return on investment than Perdoceo Education. However, Shyft is 3.49 times more volatile than Perdoceo Education. It trades about 0.07 of its potential returns per unit of risk. Perdoceo Education is currently generating about 0.18 per unit of risk. If you would invest  1,130  in The Shyft Group on October 26, 2024 and sell it today you would earn a total of  50.00  from holding The Shyft Group or generate 4.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

The Shyft Group  vs.  Perdoceo Education

Shyft Group

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Shyft Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Shyft may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Perdoceo Education

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Perdoceo Education are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Perdoceo Education reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shyft and Perdoceo Education

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

The idea behind The Shyft Group and Perdoceo 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..