Correlation Between BAYNGR and Four Seasons

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

By analyzing existing cross correlation between BAYNGR 44 15 JUL 44 and Four Seasons Education, you can compare the effects of market volatilities on BAYNGR and Four Seasons 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 BAYNGR with a short position of Four Seasons. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAYNGR and Four Seasons.

Diversification Opportunities for BAYNGR and Four Seasons

0.03

Correlation Coefficient

BAYNGR  Four Seasons

Significant diversification

The 3 months correlation between BAYNGR and Four is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding BAYNGR 44 15 JUL 44 and Four Seasons Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Four Seasons Education and BAYNGR 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 BAYNGR 44 15 JUL 44 are associated (or correlated) with Four Seasons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Four Seasons Education has no effect on the direction of BAYNGR i.e., BAYNGR and Four Seasons go up and down completely randomly.

Pair Corralation between BAYNGR and Four Seasons

Assuming the 90 days trading horizon BAYNGR 44 15 JUL 44 is expected to generate 0.3 times more return on investment than Four Seasons. However, BAYNGR 44 15 JUL 44 is 3.33 times less risky than Four Seasons. It trades about 0.16 of its potential returns per unit of risk. Four Seasons Education is currently generating about 0.02 per unit of risk. If you would invest  7,527  in BAYNGR 44 15 JUL 44 on December 30, 2024 and sell it today you would earn a total of  625.00  from holding BAYNGR 44 15 JUL 44 or generate 8.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	54.1%
Values	Daily Returns

BAYNGR 44 15 JUL 44  vs.  Four Seasons Education

BAYNGR 44 15

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BAYNGR 44 15 JUL 44 are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, BAYNGR sustained solid returns over the last few months and may actually be approaching a breakup point.

Four Seasons Education

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Four Seasons Education are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental indicators, Four Seasons may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with BAYNGR and Four Seasons

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

The idea behind BAYNGR 44 15 JUL 44 and Four Seasons 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.