Correlation Between Stride and China Liberal

Can any of the company-specific risk be diversified away by investing in both Stride and China Liberal 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 Stride and China Liberal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stride Inc and China Liberal Education, you can compare the effects of market volatilities on Stride and China Liberal 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 Stride with a short position of China Liberal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stride and China Liberal.

Diversification Opportunities for Stride and China Liberal

-0.41

Correlation Coefficient

Stride  China Liberal

Very good diversification

The 3 months correlation between Stride and China is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Stride Inc and China Liberal Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Liberal Education and Stride 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 Stride Inc are associated (or correlated) with China Liberal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Liberal Education has no effect on the direction of Stride i.e., Stride and China Liberal go up and down completely randomly.

Pair Corralation between Stride and China Liberal

Considering the 90-day investment horizon Stride Inc is expected to generate 0.22 times more return on investment than China Liberal. However, Stride Inc is 4.45 times less risky than China Liberal. It trades about 0.21 of its potential returns per unit of risk. China Liberal Education is currently generating about -0.12 per unit of risk. If you would invest  5,589  in Stride Inc on February 22, 2024 and sell it today you would earn a total of  1,381  from holding Stride Inc or generate 24.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Stride Inc  vs.  China Liberal Education

Stride Inc

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stride Inc are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Stride displayed solid returns over the last few months and may actually be approaching a breakup point.

China Liberal Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days China Liberal Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in June 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Stride and China Liberal

The main advantage of trading using opposite Stride and China Liberal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stride position performs unexpectedly, China Liberal 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 China Liberal will offset losses from the drop in China Liberal's long position.

The idea behind Stride Inc and China Liberal Education 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.