Correlation Between Chalice Mining and STRAYER EDUCATION

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

By analyzing existing cross correlation between Chalice Mining Limited and STRAYER EDUCATION, you can compare the effects of market volatilities on Chalice Mining and STRAYER 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 Chalice Mining with a short position of STRAYER EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chalice Mining and STRAYER EDUCATION.

Diversification Opportunities for Chalice Mining and STRAYER EDUCATION

-0.7

Correlation Coefficient

Chalice Mining  STRAYER EDUCATION

Excellent diversification

The 3 months correlation between Chalice and STRAYER is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Chalice Mining Limited and STRAYER EDUCATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STRAYER EDUCATION and Chalice Mining 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 Chalice Mining Limited are associated (or correlated) with STRAYER EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STRAYER EDUCATION has no effect on the direction of Chalice Mining i.e., Chalice Mining and STRAYER EDUCATION go up and down completely randomly.

Pair Corralation between Chalice Mining and STRAYER EDUCATION

Assuming the 90 days horizon Chalice Mining Limited is expected to under-perform the STRAYER EDUCATION. In addition to that, Chalice Mining is 2.66 times more volatile than STRAYER EDUCATION. It trades about -0.3 of its total potential returns per unit of risk. STRAYER EDUCATION is currently generating about 0.19 per unit of volatility. If you would invest  8,943  in STRAYER EDUCATION on September 20, 2024 and sell it today you would earn a total of  507.00  from holding STRAYER EDUCATION or generate 5.67% return on investment over 90 days.

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

Chalice Mining Limited  vs.  STRAYER EDUCATION

Chalice Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chalice Mining Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

STRAYER EDUCATION

Risk-Adjusted Performance

9 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STRAYER EDUCATION are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, STRAYER EDUCATION exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Chalice Mining and STRAYER EDUCATION

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

The idea behind Chalice Mining Limited and STRAYER 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.