Correlation Between ATA Creativity and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both ATA Creativity and Grand Canyon 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 ATA Creativity and Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ATA Creativity Global and Grand Canyon Education, you can compare the effects of market volatilities on ATA Creativity and Grand Canyon 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 ATA Creativity with a short position of Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ATA Creativity and Grand Canyon.
Diversification Opportunities for ATA Creativity and Grand Canyon
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ATA and Grand is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding ATA Creativity Global and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education and ATA Creativity 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 ATA Creativity Global are associated (or correlated) with Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of ATA Creativity i.e., ATA Creativity and Grand Canyon go up and down completely randomly.
Pair Corralation between ATA Creativity and Grand Canyon
Given the investment horizon of 90 days ATA Creativity is expected to generate 9.5 times less return on investment than Grand Canyon. But when comparing it to its historical volatility, ATA Creativity Global is 1.46 times less risky than Grand Canyon. It trades about 0.05 of its potential returns per unit of risk. Grand Canyon Education is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 13,340 in Grand Canyon Education on August 28, 2024 and sell it today you would earn a total of 3,448 from holding Grand Canyon Education or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ATA Creativity Global vs. Grand Canyon Education
Performance |
| Timeline |
| ATA Creativity Global |
| Grand Canyon Education |
ATA Creativity and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ATA Creativity and Grand Canyon
The main advantage of trading using opposite ATA Creativity and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ATA Creativity position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| ATA Creativity vs. Universal Technical Institute | ATA Creativity vs. Cogna Educacao SA | ATA Creativity vs. Sunlands Technology Group | ATA Creativity vs. American Public Education |
| Grand Canyon vs. American Public Education | Grand Canyon vs. Lincoln Educational Services | Grand Canyon vs. Adtalem Global 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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