Correlation Between Graham Holdings and Gannett
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Gannett 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 Gannett 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 Gannett Co, you can compare the effects of market volatilities on Graham Holdings and Gannett 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 Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Gannett.
Diversification Opportunities for Graham Holdings and Gannett
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Graham and Gannett is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett 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 Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Graham Holdings i.e., Graham Holdings and Gannett go up and down completely randomly.
Pair Corralation between Graham Holdings and Gannett
Considering the 90-day investment horizon Graham Holdings Co is expected to generate 0.63 times more return on investment than Gannett. However, Graham Holdings Co is 1.59 times less risky than Gannett. It trades about 0.14 of its potential returns per unit of risk. Gannett Co is currently generating about -0.04 per unit of risk. 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 Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graham Holdings Co vs. Gannett Co
Performance |
| Timeline |
| Graham Holdings |
| Gannett |
Graham Holdings and Gannett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham Holdings and Gannett
The main advantage of trading using opposite Graham Holdings and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, Gannett 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 Gannett will offset losses from the drop in Gannett's 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 |
| Gannett vs. Dallasnews Corp | Gannett vs. Scholastic | Gannett vs. Pearson PLC ADR | Gannett vs. New York Times |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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