Correlation Between Elite Education and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both Elite Education and Graham Holdings 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 Elite Education and Graham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elite Education Group and Graham Holdings Co, you can compare the effects of market volatilities on Elite Education and Graham Holdings 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 Elite Education with a short position of Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elite Education and Graham Holdings.
Diversification Opportunities for Elite Education and Graham Holdings
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Elite and Graham is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Elite Education Group and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and Elite 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 Elite Education Group are associated (or correlated) with Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Elite Education i.e., Elite Education and Graham Holdings go up and down completely randomly.
Pair Corralation between Elite Education and Graham Holdings
Given the investment horizon of 90 days Elite Education is expected to generate 1.01 times less return on investment than Graham Holdings. In addition to that, Elite Education is 1.42 times more volatile than Graham Holdings Co. It trades about 0.17 of its total potential returns per unit of risk. Graham Holdings Co is currently generating about 0.25 per unit of volatility. If you would invest 78,025 in Graham Holdings Co on August 24, 2024 and sell it today you would earn a total of 13,780 from holding Graham Holdings Co or generate 17.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elite Education Group vs. Graham Holdings Co
Performance |
| Timeline |
| Elite Education Group |
| Graham Holdings |
Elite Education and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elite Education and Graham Holdings
The main advantage of trading using opposite Elite Education and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elite Education position performs unexpectedly, Graham Holdings 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 Graham Holdings will offset losses from the drop in Graham Holdings' long position.| Elite Education vs. Golden Sun Education | Elite Education vs. Jianzhi Education Technology | Elite Education vs. Genius Group | Elite Education vs. Lixiang Education Holding |
| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Madison Square Garden |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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