Correlation Between Golden Sun and Meten Edtechx

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

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

Diversification Opportunities for Golden Sun and Meten Edtechx

0.24

Correlation Coefficient

Golden Sun  Meten Edtechx

Modest diversification

The 3 months correlation between Golden and Meten is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and Meten Edtechx Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meten Edtechx Education and Golden Sun 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 Golden Sun Education are associated (or correlated) with Meten Edtechx. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meten Edtechx Education has no effect on the direction of Golden Sun i.e., Golden Sun and Meten Edtechx go up and down completely randomly.

Pair Corralation between Golden Sun and Meten Edtechx

If you would invest  19.00  in Meten Edtechx Education on September 2, 2024 and sell it today you would earn a total of  0.00  from holding Meten Edtechx Education or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.56%
Values	Daily Returns

Golden Sun Education  vs.  Meten Edtechx Education

Golden Sun Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Sun Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Meten Edtechx Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Meten Edtechx Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Meten Edtechx is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Golden Sun and Meten Edtechx

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

The idea behind Golden Sun Education and Meten Edtechx 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.