Correlation Between Everybody Loves and Ambow Education
Can any of the company-specific risk be diversified away by investing in both Everybody Loves and Ambow 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 Everybody Loves and Ambow Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Everybody Loves Languages and Ambow Education Holding, you can compare the effects of market volatilities on Everybody Loves and Ambow 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 Everybody Loves with a short position of Ambow Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Everybody Loves and Ambow Education.
Diversification Opportunities for Everybody Loves and Ambow Education
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Everybody and Ambow is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Everybody Loves Languages and Ambow Education Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambow Education Holding and Everybody Loves 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 Everybody Loves Languages are associated (or correlated) with Ambow Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambow Education Holding has no effect on the direction of Everybody Loves i.e., Everybody Loves and Ambow Education go up and down completely randomly.
Pair Corralation between Everybody Loves and Ambow Education
Assuming the 90 days horizon Everybody Loves is expected to generate 1.52 times less return on investment than Ambow Education. But when comparing it to its historical volatility, Everybody Loves Languages is 1.31 times less risky than Ambow Education. It trades about 0.07 of its potential returns per unit of risk. Ambow Education Holding is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 303.00 in Ambow Education Holding on August 15, 2025 and sell it today you would earn a total of 102.00 from holding Ambow Education Holding or generate 33.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Everybody Loves Languages vs. Ambow Education Holding
Performance |
| Timeline |
| Everybody Loves Languages |
| Ambow Education Holding |
Everybody Loves and Ambow Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Everybody Loves and Ambow Education
The main advantage of trading using opposite Everybody Loves and Ambow Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Everybody Loves position performs unexpectedly, Ambow 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 Ambow Education will offset losses from the drop in Ambow Education's long position.The idea behind Everybody Loves Languages and Ambow Education Holding 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.| Ambow Education vs. Lixiang Education Holding | Ambow Education vs. LQR House | Ambow Education vs. SW Seed Company | Ambow Education vs. Rapid Line |
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.
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