Correlation Between STWC Holdings and Peoples Educational

Can any of the company-specific risk be diversified away by investing in both STWC Holdings and Peoples Educational 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 STWC Holdings and Peoples Educational into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between STWC Holdings and Peoples Educational Holdings, you can compare the effects of market volatilities on STWC Holdings and Peoples Educational 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 STWC Holdings with a short position of Peoples Educational. Check out your portfolio center. Please also check ongoing floating volatility patterns of STWC Holdings and Peoples Educational.

Diversification Opportunities for STWC Holdings and Peoples Educational

1.0

Correlation Coefficient

STWC Holdings  Peoples Educational

No risk reduction

The 3 months correlation between STWC and Peoples is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding STWC Holdings and Peoples Educational Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Educational and STWC 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 STWC Holdings are associated (or correlated) with Peoples Educational. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Educational has no effect on the direction of STWC Holdings i.e., STWC Holdings and Peoples Educational go up and down completely randomly.

Pair Corralation between STWC Holdings and Peoples Educational

If you would invest  0.01  in Peoples Educational Holdings on March 20, 2024 and sell it today you would earn a total of  0.00  from holding Peoples Educational Holdings or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

STWC Holdings  vs.  Peoples Educational Holdings

STWC Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Peoples Educational

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peoples Educational Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, Peoples Educational is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with STWC Holdings and Peoples Educational

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

The idea behind STWC Holdings and Peoples Educational Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.