Correlation Between PDD Holdings and Elite Education
Can any of the company-specific risk be diversified away by investing in both PDD Holdings and Elite 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 PDD Holdings and Elite Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PDD Holdings and Elite Education Group, you can compare the effects of market volatilities on PDD Holdings and Elite 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 PDD Holdings with a short position of Elite Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of PDD Holdings and Elite Education.
Diversification Opportunities for PDD Holdings and Elite Education
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between PDD and Elite is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding PDD Holdings and Elite Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elite Education Group and PDD Holdings 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 PDD Holdings are associated (or correlated) with Elite Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elite Education Group has no effect on the direction of PDD Holdings i.e., PDD Holdings and Elite Education go up and down completely randomly.
Pair Corralation between PDD Holdings and Elite Education
Considering the 90-day investment horizon PDD Holdings is expected to generate 2.66 times less return on investment than Elite Education. But when comparing it to its historical volatility, PDD Holdings is 10.95 times less risky than Elite Education. It trades about 0.21 of its potential returns per unit of risk. Elite Education Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Elite Education Group on June 2, 2025 and sell it today you would lose (10.00) from holding Elite Education Group or give up 15.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PDD Holdings vs. Elite Education Group
Performance |
| Timeline |
| PDD Holdings |
| Elite Education Group |
PDD Holdings and Elite Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PDD Holdings and Elite Education
The main advantage of trading using opposite PDD Holdings and Elite Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PDD Holdings position performs unexpectedly, Elite 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 Elite Education will offset losses from the drop in Elite Education's long position.| PDD Holdings vs. JD Inc Adr | PDD Holdings vs. Alibaba Group Holding | PDD Holdings vs. Sea | PDD Holdings vs. Vipshop Holdings Limited |
| Elite Education vs. American Public Education | Elite Education vs. Ihuman Inc | Elite Education vs. Adtalem Global Education | Elite Education vs. Laureate Education |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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