Correlation Between Skillful Craftsman and New Oriental
Can any of the company-specific risk be diversified away by investing in both Skillful Craftsman and New Oriental 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 Skillful Craftsman and New Oriental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Skillful Craftsman Education and New Oriental Education, you can compare the effects of market volatilities on Skillful Craftsman and New Oriental 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 Skillful Craftsman with a short position of New Oriental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Skillful Craftsman and New Oriental.
Diversification Opportunities for Skillful Craftsman and New Oriental
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Skillful and New is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Skillful Craftsman Education and New Oriental Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Oriental Education and Skillful Craftsman 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 Skillful Craftsman Education are associated (or correlated) with New Oriental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Oriental Education has no effect on the direction of Skillful Craftsman i.e., Skillful Craftsman and New Oriental go up and down completely randomly.
Pair Corralation between Skillful Craftsman and New Oriental
Given the investment horizon of 90 days Skillful Craftsman Education is expected to generate 3.06 times more return on investment than New Oriental. However, Skillful Craftsman is 3.06 times more volatile than New Oriental Education. It trades about 0.09 of its potential returns per unit of risk. New Oriental Education is currently generating about 0.24 per unit of risk. If you would invest 98.00 in Skillful Craftsman Education on June 8, 2025 and sell it today you would earn a total of 6.00 from holding Skillful Craftsman Education or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Skillful Craftsman Education vs. New Oriental Education
Performance |
| Timeline |
| Skillful Craftsman |
| New Oriental Education |
Skillful Craftsman and New Oriental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Skillful Craftsman and New Oriental
The main advantage of trading using opposite Skillful Craftsman and New Oriental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Skillful Craftsman position performs unexpectedly, New Oriental 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 New Oriental will offset losses from the drop in New Oriental's long position.| Skillful Craftsman vs. Lixiang Education Holding | Skillful Craftsman vs. Ambow Education Holding | Skillful Craftsman vs. ATA Creativity Global | Skillful Craftsman vs. Universal Technical Institute |
| New Oriental vs. TAL Education Group | New Oriental vs. Gaotu Techedu DRC | New Oriental vs. 17 Education Technology | New Oriental vs. Chegg Inc |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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