Correlation Between Graham Holdings and Exchange Bankshares
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Exchange Bankshares 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 Graham Holdings and Exchange Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graham Holdings Co and Exchange Bankshares, you can compare the effects of market volatilities on Graham Holdings and Exchange Bankshares 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 Graham Holdings with a short position of Exchange Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Exchange Bankshares.
Diversification Opportunities for Graham Holdings and Exchange Bankshares
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Graham and Exchange is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Exchange Bankshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Exchange Bankshares and Graham Holdings 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 Graham Holdings Co are associated (or correlated) with Exchange Bankshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exchange Bankshares has no effect on the direction of Graham Holdings i.e., Graham Holdings and Exchange Bankshares go up and down completely randomly.
Pair Corralation between Graham Holdings and Exchange Bankshares
Considering the 90-day investment horizon Graham Holdings Co is expected to under-perform the Exchange Bankshares. In addition to that, Graham Holdings is 1.56 times more volatile than Exchange Bankshares. It trades about -0.22 of its total potential returns per unit of risk. Exchange Bankshares is currently generating about 0.3 per unit of volatility. If you would invest 4,501 in Exchange Bankshares on October 9, 2024 and sell it today you would earn a total of 289.00 from holding Exchange Bankshares or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graham Holdings Co vs. Exchange Bankshares
Performance |
| Timeline |
| Graham Holdings |
| Exchange Bankshares |
Graham Holdings and Exchange Bankshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham Holdings and Exchange Bankshares
The main advantage of trading using opposite Graham Holdings and Exchange Bankshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, Exchange Bankshares 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 Exchange Bankshares will offset losses from the drop in Exchange Bankshares' long position.| Graham Holdings vs. Cable One | Graham Holdings vs. Adtalem Global Education | Graham Holdings vs. Axalta Coating Systems | Graham Holdings vs. Madison Square Garden |
| Exchange Bankshares vs. First Community Financial | Exchange Bankshares vs. National Capital Bank | Exchange Bankshares vs. Oakworth Capital | Exchange Bankshares vs. Truxton |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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