Correlation Between Exchange Bankshares and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both Exchange Bankshares 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 Exchange Bankshares and Graham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Exchange Bankshares and Graham Holdings Co, you can compare the effects of market volatilities on Exchange Bankshares 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 Exchange Bankshares with a short position of Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exchange Bankshares and Graham Holdings.
Diversification Opportunities for Exchange Bankshares and Graham Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Exchange and Graham is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Exchange Bankshares and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and Exchange Bankshares 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 Exchange Bankshares 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 Exchange Bankshares i.e., Exchange Bankshares and Graham Holdings go up and down completely randomly.
Pair Corralation between Exchange Bankshares and Graham Holdings
Given the investment horizon of 90 days Exchange Bankshares is expected to generate 11.85 times less return on investment than Graham Holdings. But when comparing it to its historical volatility, Exchange Bankshares is 19.8 times less risky than Graham Holdings. It trades about 0.24 of its potential returns per unit of risk. Graham Holdings Co is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 87,224 in Graham Holdings Co on October 23, 2024 and sell it today you would earn a total of 3,326 from holding Graham Holdings Co or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Exchange Bankshares vs. Graham Holdings Co
Performance |
| Timeline |
| Exchange Bankshares |
| Graham Holdings |
Exchange Bankshares and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Exchange Bankshares and Graham Holdings
The main advantage of trading using opposite Exchange Bankshares and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exchange Bankshares 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.| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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