Correlation Between Franklin Covey and Ambow Education
Can any of the company-specific risk be diversified away by investing in both Franklin Covey 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 Franklin Covey and Ambow Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Covey and Ambow Education Holding, you can compare the effects of market volatilities on Franklin Covey 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 Franklin Covey with a short position of Ambow Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Covey and Ambow Education.
Diversification Opportunities for Franklin Covey and Ambow Education
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Franklin and Ambow is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Covey 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 Franklin Covey 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 Franklin Covey 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 Franklin Covey i.e., Franklin Covey and Ambow Education go up and down completely randomly.
Pair Corralation between Franklin Covey and Ambow Education
Allowing for the 90-day total investment horizon Franklin Covey is expected to under-perform the Ambow Education. But the stock apears to be less risky and, when comparing its historical volatility, Franklin Covey is 7.61 times less risky than Ambow Education. The stock trades about -0.02 of its potential returns per unit of risk. The Ambow Education Holding is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 144.00 in Ambow Education Holding on January 25, 2024 and sell it today you would earn a total of 30.00 from holding Ambow Education Holding or generate 20.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Franklin Covey vs. Ambow Education Holding
Performance |
| Timeline |
| Franklin Covey |
| Ambow Education Holding |
Franklin Covey and Ambow Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Covey and Ambow Education
The main advantage of trading using opposite Franklin Covey and Ambow Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Covey 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.| Franklin Covey vs. CRA International | Franklin Covey vs. Thermon Group Holdings | Franklin Covey vs. Forrester Research | Franklin Covey vs. Forestar Group |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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