Correlation Between Hope Education and Strong Petrochemical

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

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

Diversification Opportunities for Hope Education and Strong Petrochemical

0.0

Correlation Coefficient

Hope Education  Strong Petrochemical

Pay attention - limited upside

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

Pair Corralation between Hope Education and Strong Petrochemical

If you would invest  1.00  in Hope Education Group on April 10, 2025 and sell it today you would earn a total of  0.40  from holding Hope Education Group or generate 40.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Hope Education Group  vs.  Strong Petrochemical Holdings

Hope Education Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hope Education Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hope Education reported solid returns over the last few months and may actually be approaching a breakup point.

Strong Petrochemical

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strong Petrochemical Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Strong Petrochemical is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Hope Education and Strong Petrochemical

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

The idea behind Hope Education Group and Strong Petrochemical 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.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.