Correlation Between Turning Point and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both Turning Point and Bright Scholar 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 Turning Point and Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Turning Point Brands and Bright Scholar Education, you can compare the effects of market volatilities on Turning Point and Bright Scholar 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 Turning Point with a short position of Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Turning Point and Bright Scholar.
Diversification Opportunities for Turning Point and Bright Scholar
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Turning and Bright is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Turning Point Brands and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education and Turning Point 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 Turning Point Brands are associated (or correlated) with Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Turning Point i.e., Turning Point and Bright Scholar go up and down completely randomly.
Pair Corralation between Turning Point and Bright Scholar
Considering the 90-day investment horizon Turning Point Brands is expected to generate 0.39 times more return on investment than Bright Scholar. However, Turning Point Brands is 2.55 times less risky than Bright Scholar. It trades about 0.26 of its potential returns per unit of risk. Bright Scholar Education is currently generating about 0.01 per unit of risk. If you would invest 3,236 in Turning Point Brands on September 24, 2024 and sell it today you would earn a total of 2,678 from holding Turning Point Brands or generate 82.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 96.85% |
Values | Daily Returns |
Turning Point Brands vs. Bright Scholar Education
Performance |
Timeline |
Turning Point Brands |
Bright Scholar Education |
Turning Point and Bright Scholar Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Turning Point and Bright Scholar
The main advantage of trading using opposite Turning Point and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Turning Point position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.Turning Point vs. Green Cures Botanical | Turning Point vs. Easton Pharmaceutica | Turning Point vs. Rocky Mountain High | Turning Point vs. American Green |
Bright Scholar vs. Laureate Education | Bright Scholar vs. China Liberal Education | Bright Scholar vs. Adtalem Global Education | Bright Scholar vs. Grand Canyon 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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