Correlation Between STI Education and IPM Holdings

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

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

Diversification Opportunities for STI Education and IPM Holdings

0.0

Correlation Coefficient

STI Education  IPM Holdings

Pay attention - limited upside

The 3 months correlation between STI and IPM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and IPM Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IPM Holdings and STI 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 STI Education Systems are associated (or correlated) with IPM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IPM Holdings has no effect on the direction of STI Education i.e., STI Education and IPM Holdings go up and down completely randomly.

Pair Corralation between STI Education and IPM Holdings

If you would invest  124.00  in STI Education Systems on October 11, 2024 and sell it today you would earn a total of  18.00  from holding STI Education Systems or generate 14.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

STI Education Systems  vs.  IPM Holdings

STI Education Systems

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STI Education Systems are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, STI Education exhibited solid returns over the last few months and may actually be approaching a breakup point.

IPM Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days IPM Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, IPM Holdings is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with STI Education and IPM Holdings

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

The idea behind STI Education Systems and IPM Holdings 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.