Correlation Between Strategic Education and Element Solutions

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Strategic Education and Element Solutions 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 Strategic Education and Element Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Education and Element Solutions, you can compare the effects of market volatilities on Strategic Education and Element Solutions 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 Strategic Education with a short position of Element Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Education and Element Solutions.

Diversification Opportunities for Strategic Education and Element Solutions

-0.15
  Correlation Coefficient

Good diversification

The 3 months correlation between Strategic and Element is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Education and Element Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Solutions and Strategic 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 Strategic Education are associated (or correlated) with Element Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Solutions has no effect on the direction of Strategic Education i.e., Strategic Education and Element Solutions go up and down completely randomly.

Pair Corralation between Strategic Education and Element Solutions

Given the investment horizon of 90 days Strategic Education is expected to generate 3.27 times more return on investment than Element Solutions. However, Strategic Education is 3.27 times more volatile than Element Solutions. It trades about 0.23 of its potential returns per unit of risk. Element Solutions is currently generating about 0.03 per unit of risk. If you would invest  9,885  in Strategic Education on February 21, 2024 and sell it today you would earn a total of  1,911  from holding Strategic Education or generate 19.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Strategic Education  vs.  Element Solutions

 Performance 
       Timeline  
Strategic Education 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Strategic Education are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, Strategic Education sustained solid returns over the last few months and may actually be approaching a breakup point.
Element Solutions 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Element Solutions are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Element Solutions is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Strategic Education and Element Solutions Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Strategic Education and Element Solutions

The main advantage of trading using opposite Strategic Education and Element Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Education position performs unexpectedly, Element Solutions 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 Element Solutions will offset losses from the drop in Element Solutions' long position.
The idea behind Strategic Education and Element Solutions 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.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

Other Complementary Tools

Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes
Piotroski F Score
Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA
Global Markets Map
Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes
Portfolio Suggestion
Get suggestions outside of your existing asset allocation including your own model portfolios
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Cryptocurrency Center
Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency
FinTech Suite
Use AI to screen and filter profitable investment opportunities