Correlation Between Ambow Education and New Oriental
Can any of the company-specific risk be diversified away by investing in both Ambow Education and New Oriental 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 Ambow Education and New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ambow Education Holding and New Oriental Education, you can compare the effects of market volatilities on Ambow Education and New Oriental 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 Ambow Education with a short position of New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambow Education and New Oriental.
Diversification Opportunities for Ambow Education and New Oriental
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Ambow and New is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ambow Education Holding and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education and Ambow 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 Ambow Education Holding are associated (or correlated) with New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Ambow Education i.e., Ambow Education and New Oriental go up and down completely randomly.
Pair Corralation between Ambow Education and New Oriental
Given the investment horizon of 90 days Ambow Education Holding is expected to generate 9.18 times more return on investment than New Oriental. However, Ambow Education is 9.18 times more volatile than New Oriental Education. It trades about 0.04 of its potential returns per unit of risk. New Oriental Education is currently generating about 0.12 per unit of risk. If you would invest 680.00 in Ambow Education Holding on December 30, 2023 and sell it today you would lose (508.00) from holding Ambow Education Holding or give up 74.71% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Ambow Education Holding vs. New Oriental Education
Performance |
Timeline |
Ambow Education Holding |
New Oriental Education |
Ambow Education and New Oriental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ambow Education and New Oriental
The main advantage of trading using opposite Ambow Education and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambow Education position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.Ambow Education vs. PVH Corp | Ambow Education vs. Cumberland Pharmaceuticals | Ambow Education vs. Tandy Leather Factory | Ambow Education vs. Merit Medical Systems |
New Oriental vs. Procter Gamble | New Oriental vs. Snap On | New Oriental vs. Sun Country Airlines | New Oriental vs. United Guardian |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |