Correlation Between Ambow Education and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both Ambow Education and Graham Holdings 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 Graham Holdings 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 Graham Holdings Co, you can compare the effects of market volatilities on Ambow Education and Graham Holdings 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 Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ambow Education and Graham Holdings.
Diversification Opportunities for Ambow Education and Graham Holdings
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ambow and Graham is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Ambow Education Holding and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings 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 Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Ambow Education i.e., Ambow Education and Graham Holdings go up and down completely randomly.
Pair Corralation between Ambow Education and Graham Holdings
Given the investment horizon of 90 days Ambow Education Holding is expected to generate 10.23 times more return on investment than Graham Holdings. However, Ambow Education is 10.23 times more volatile than Graham Holdings Co. It trades about 0.07 of its potential returns per unit of risk. Graham Holdings Co is currently generating about -0.02 per unit of risk. If you would invest 144.00 in Ambow Education Holding on January 21, 2024 and sell it today you would earn a total of 29.00 from holding Ambow Education Holding or generate 20.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ambow Education Holding vs. Graham Holdings Co
Performance |
| Timeline |
| Ambow Education Holding |
| Graham Holdings |
Ambow Education and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ambow Education and Graham Holdings
The main advantage of trading using opposite Ambow Education and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ambow Education position performs unexpectedly, Graham Holdings 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 Graham Holdings will offset losses from the drop in Graham Holdings' long position.| Ambow Education vs. Vasta PlatformLtd | Ambow Education vs. Sunlands Technology Group | Ambow Education vs. Cogna Educacao SA | Ambow Education vs. American Public Education |
| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Edgewell Personal Care |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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