Correlation Between 51Talk Online and Ambow Education
Can any of the company-specific risk be diversified away by investing in both 51Talk Online and Ambow Education 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 51Talk Online and Ambow Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 51Talk Online Education and Ambow Education Holding, you can compare the effects of market volatilities on 51Talk Online and Ambow Education 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 51Talk Online with a short position of Ambow Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of 51Talk Online and Ambow Education.
Diversification Opportunities for 51Talk Online and Ambow Education
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between 51Talk and Ambow is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding 51Talk Online Education and Ambow Education Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambow Education Holding and 51Talk Online 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 51Talk Online Education are associated (or correlated) with Ambow Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambow Education Holding has no effect on the direction of 51Talk Online i.e., 51Talk Online and Ambow Education go up and down completely randomly.
Pair Corralation between 51Talk Online and Ambow Education
Considering the 90-day investment horizon 51Talk Online Education is expected to generate 0.63 times more return on investment than Ambow Education. However, 51Talk Online Education is 1.59 times less risky than Ambow Education. It trades about -0.04 of its potential returns per unit of risk. Ambow Education Holding is currently generating about -0.04 per unit of risk. If you would invest 682.00 in 51Talk Online Education on January 21, 2024 and sell it today you would lose (35.00) from holding 51Talk Online Education or give up 5.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
51Talk Online Education vs. Ambow Education Holding
Performance |
| Timeline |
| 51Talk Online Education |
| Ambow Education Holding |
51Talk Online and Ambow Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 51Talk Online and Ambow Education
The main advantage of trading using opposite 51Talk Online and Ambow Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 51Talk Online position performs unexpectedly, Ambow Education 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 Ambow Education will offset losses from the drop in Ambow Education's long position.| 51Talk Online vs. Wah Fu Education | 51Talk Online vs. Four Seasons Education | 51Talk Online vs. Sunlands Technology Group | 51Talk Online vs. China Liberal Education |
| Ambow Education vs. Vasta PlatformLtd | Ambow Education vs. Sunlands Technology Group | Ambow Education vs. Cogna Educacao SA | Ambow Education vs. American Public Education |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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