Correlation Between Ambow Education and Franklin Covey
Can any of the company-specific risk be diversified away by investing in both Ambow Education and Franklin Covey 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 Franklin Covey 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 Franklin Covey, you can compare the effects of market volatilities on Ambow Education and Franklin Covey 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 Franklin Covey. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambow Education and Franklin Covey.
Diversification Opportunities for Ambow Education and Franklin Covey
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ambow and Franklin is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ambow Education Holding and Franklin Covey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Covey 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 Franklin Covey. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Covey has no effect on the direction of Ambow Education i.e., Ambow Education and Franklin Covey go up and down completely randomly.
Pair Corralation between Ambow Education and Franklin Covey
Given the investment horizon of 90 days Ambow Education Holding is expected to generate 34.59 times more return on investment than Franklin Covey. However, Ambow Education is 34.59 times more volatile than Franklin Covey. It trades about 0.09 of its potential returns per unit of risk. Franklin Covey is currently generating about 0.01 per unit of risk. If you would invest 149.00 in Ambow Education Holding on January 18, 2024 and sell it today you would earn a total of 3.00 from holding Ambow Education Holding or generate 2.01% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.19% |
Values | Daily Returns |
Ambow Education Holding vs. Franklin Covey
Performance |
Timeline |
Ambow Education Holding |
Franklin Covey |
Ambow Education and Franklin Covey Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ambow Education and Franklin Covey
The main advantage of trading using opposite Ambow Education and Franklin Covey positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambow Education position performs unexpectedly, Franklin Covey 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 Franklin Covey will offset losses from the drop in Franklin Covey's long position.The idea behind Ambow Education Holding and Franklin Covey 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.Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |