Correlation Between Sunlands Technology and Coursera

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

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

Diversification Opportunities for Sunlands Technology and Coursera

-0.55

Correlation Coefficient

Sunlands Technology  Coursera

Excellent diversification

The 3 months correlation between Sunlands and Coursera is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Coursera in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coursera and Sunlands Technology 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 Sunlands Technology Group are associated (or correlated) with Coursera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coursera has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Coursera go up and down completely randomly.

Pair Corralation between Sunlands Technology and Coursera

Considering the 90-day investment horizon Sunlands Technology Group is expected to under-perform the Coursera. In addition to that, Sunlands Technology is 1.54 times more volatile than Coursera. It trades about -0.12 of its total potential returns per unit of risk. Coursera is currently generating about 0.1 per unit of volatility. If you would invest  745.00  in Coursera on October 10, 2024 and sell it today you would earn a total of  111.00  from holding Coursera or generate 14.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sunlands Technology Group  vs.  Coursera

Sunlands Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunlands Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Coursera

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Coursera are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Coursera reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunlands Technology and Coursera

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

The idea behind Sunlands Technology Group and Coursera 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.