Correlation Between STRAYER EDUCATION and Kawasaki Kisen

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

By analyzing existing cross correlation between STRAYER EDUCATION and Kawasaki Kisen Kaisha, you can compare the effects of market volatilities on STRAYER EDUCATION and Kawasaki Kisen 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 STRAYER EDUCATION with a short position of Kawasaki Kisen. Check out your portfolio center. Please also check ongoing floating volatility patterns of STRAYER EDUCATION and Kawasaki Kisen.

Diversification Opportunities for STRAYER EDUCATION and Kawasaki Kisen

0.03

Correlation Coefficient

STRAYER EDUCATION  Kawasaki Kisen

Significant diversification

The 3 months correlation between STRAYER and Kawasaki is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding STRAYER EDUCATION and Kawasaki Kisen Kaisha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kawasaki Kisen Kaisha and STRAYER 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 STRAYER EDUCATION are associated (or correlated) with Kawasaki Kisen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kawasaki Kisen Kaisha has no effect on the direction of STRAYER EDUCATION i.e., STRAYER EDUCATION and Kawasaki Kisen go up and down completely randomly.

Pair Corralation between STRAYER EDUCATION and Kawasaki Kisen

Assuming the 90 days trading horizon STRAYER EDUCATION is expected to under-perform the Kawasaki Kisen. But the stock apears to be less risky and, when comparing its historical volatility, STRAYER EDUCATION is 1.28 times less risky than Kawasaki Kisen. The stock trades about -0.04 of its potential returns per unit of risk. The Kawasaki Kisen Kaisha is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,423  in Kawasaki Kisen Kaisha on September 29, 2024 and sell it today you would lose (111.00) from holding Kawasaki Kisen Kaisha or give up 7.8% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.22%
Values	Daily Returns

STRAYER EDUCATION  vs.  Kawasaki Kisen Kaisha

STRAYER EDUCATION

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in STRAYER EDUCATION are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, STRAYER EDUCATION may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Kawasaki Kisen Kaisha

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kawasaki Kisen Kaisha has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable forward indicators, Kawasaki Kisen is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with STRAYER EDUCATION and Kawasaki Kisen

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

The idea behind STRAYER EDUCATION and Kawasaki Kisen Kaisha 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.