Correlation Between Ambow Education and OneSmart International

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

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

Diversification Opportunities for Ambow Education and OneSmart International

0.0

Correlation Coefficient

Ambow Education  OneSmart International

Pay attention - limited upside

The 3 months correlation between Ambow and OneSmart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Ambow Education Holding and OneSmart International Educati in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OneSmart International and Ambow 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 Ambow Education Holding are associated (or correlated) with OneSmart International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OneSmart International has no effect on the direction of Ambow Education i.e., Ambow Education and OneSmart International go up and down completely randomly.

Pair Corralation between Ambow Education and OneSmart International

If you would invest  155.00  in OneSmart International Education on February 26, 2024 and sell it today you would earn a total of  0.00  from holding OneSmart International Education or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Ambow Education Holding  vs.  OneSmart International Educati

Ambow Education Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ambow Education Holding 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 fundamental drivers remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

OneSmart International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days OneSmart International Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, OneSmart International is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ambow Education and OneSmart International

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

The idea behind Ambow Education Holding and OneSmart International 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.