Correlation Between Legacy Education and Pan Global

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

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

Diversification Opportunities for Legacy Education and Pan Global

-0.34

Correlation Coefficient

Legacy Education  Pan Global

Very good diversification

The 3 months correlation between Legacy and Pan is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Legacy Education and Pan Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan Global Resources and Legacy 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 Legacy Education are associated (or correlated) with Pan Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan Global Resources has no effect on the direction of Legacy Education i.e., Legacy Education and Pan Global go up and down completely randomly.

Pair Corralation between Legacy Education and Pan Global

Given the investment horizon of 90 days Legacy Education is expected to generate 1.16 times more return on investment than Pan Global. However, Legacy Education is 1.16 times more volatile than Pan Global Resources. It trades about 0.3 of its potential returns per unit of risk. Pan Global Resources is currently generating about -0.06 per unit of risk. If you would invest  402.00  in Legacy Education on September 14, 2024 and sell it today you would earn a total of  422.00  from holding Legacy Education or generate 104.98% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	87.3%
Values	Daily Returns

Legacy Education  vs.  Pan Global Resources

Legacy Education

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Legacy Education are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Legacy Education showed solid returns over the last few months and may actually be approaching a breakup point.

Pan Global Resources

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Pan Global Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental 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.

Pair Trading with Legacy Education and Pan Global

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

The idea behind Legacy Education and Pan Global Resources 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.