Correlation Between Gannett and Graham Holdings
Can any of the company-specific risk be diversified away by investing in both Gannett 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 Gannett and Graham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gannett Co and Graham Holdings Co, you can compare the effects of market volatilities on Gannett 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 Gannett with a short position of Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gannett and Graham Holdings.
Diversification Opportunities for Gannett and Graham Holdings
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gannett and Graham is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gannett Co and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and Gannett 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 Gannett Co 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 Gannett i.e., Gannett and Graham Holdings go up and down completely randomly.
Pair Corralation between Gannett and Graham Holdings
Considering the 90-day investment horizon Gannett Co is expected to generate 2.05 times more return on investment than Graham Holdings. However, Gannett is 2.05 times more volatile than Graham Holdings Co. It trades about -0.07 of its potential returns per unit of risk. Graham Holdings Co is currently generating about -0.22 per unit of risk. If you would invest 544.00 in Gannett Co on October 9, 2024 and sell it today you would lose (29.00) from holding Gannett Co or give up 5.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gannett Co vs. Graham Holdings Co
Performance |
| Timeline |
| Gannett |
| Graham Holdings |
Gannett and Graham Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gannett and Graham Holdings
The main advantage of trading using opposite Gannett and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gannett 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.| Gannett vs. Dallasnews Corp | Gannett vs. Scholastic | Gannett vs. Pearson PLC ADR | Gannett vs. New York Times |
| 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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