Correlation Between 2U and Adtalem Global

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Can any of the company-specific risk be diversified away by investing in both 2U and Adtalem Global 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 2U and Adtalem Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 2U Inc and Adtalem Global Education, you can compare the effects of market volatilities on 2U and Adtalem Global 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 2U with a short position of Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of 2U and Adtalem Global.

Diversification Opportunities for 2U and Adtalem Global

2UAdtalemDiversified Away2UAdtalemDiversified Away100%
0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between 2U and Adtalem is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 2U Inc and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education and 2U 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 2U Inc are associated (or correlated) with Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of 2U i.e., 2U and Adtalem Global go up and down completely randomly.

Pair Corralation between 2U and Adtalem Global

If you would invest  9,910  in Adtalem Global Education on November 19, 2024 and sell it today you would earn a total of  437.00  from holding Adtalem Global Education or generate 4.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

2U Inc  vs.  Adtalem Global Education

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15TWOU ATGE
       Timeline  
2U Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days 2U Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, 2U is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
Adtalem Global Education 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Adtalem Global Education are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Adtalem Global exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb859095100105110

2U and Adtalem Global Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15 0.020.040.060.080.10
JavaScript chart by amCharts 3.21.15TWOU ATGE
       Returns  

Pair Trading with 2U and Adtalem Global

The main advantage of trading using opposite 2U and Adtalem Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 2U position performs unexpectedly, Adtalem Global 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 Adtalem Global will offset losses from the drop in Adtalem Global's long position.
The idea behind 2U Inc and Adtalem Global 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.

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