Correlation Between Sunlands Technology and Golden Sun
Can any of the company-specific risk be diversified away by investing in both Sunlands Technology and Golden Sun 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 Sunlands Technology and Golden Sun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunlands Technology Group and Golden Sun Education, you can compare the effects of market volatilities on Sunlands Technology and Golden Sun 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 Sunlands Technology with a short position of Golden Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunlands Technology and Golden Sun.
Diversification Opportunities for Sunlands Technology and Golden Sun
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunlands and Golden is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sunlands Technology Group and Golden Sun Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Sun Education and Sunlands Technology 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 Sunlands Technology Group are associated (or correlated) with Golden Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Sun Education has no effect on the direction of Sunlands Technology i.e., Sunlands Technology and Golden Sun go up and down completely randomly.
Pair Corralation between Sunlands Technology and Golden Sun
Considering the 90-day investment horizon Sunlands Technology is expected to generate 2.51 times less return on investment than Golden Sun. But when comparing it to its historical volatility, Sunlands Technology Group is 2.85 times less risky than Golden Sun. It trades about 0.04 of its potential returns per unit of risk. Golden Sun Education is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 700.00 in Golden Sun Education on February 22, 2024 and sell it today you would lose (59.00) from holding Golden Sun Education or give up 8.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sunlands Technology Group vs. Golden Sun Education
Performance |
Timeline |
Sunlands Technology |
Golden Sun Education |
Sunlands Technology and Golden Sun Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sunlands Technology and Golden Sun
The main advantage of trading using opposite Sunlands Technology and Golden Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunlands Technology position performs unexpectedly, Golden Sun 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 Golden Sun will offset losses from the drop in Golden Sun's long position.Sunlands Technology vs. Exceed World | Sunlands Technology vs. American Public Education | Sunlands Technology vs. IhumanInc | Sunlands Technology vs. Adtalem Global Education |
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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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