Correlation Between Graham Holdings and Acushnet Holdings

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Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Acushnet 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 Graham Holdings and Acushnet Holdings 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 Acushnet Holdings Corp, you can compare the effects of market volatilities on Graham Holdings and Acushnet 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 Graham Holdings with a short position of Acushnet Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Acushnet Holdings.

Diversification Opportunities for Graham Holdings and Acushnet Holdings

GrahamAcushnetDiversified AwayGrahamAcushnetDiversified Away100%
-0.19
  Correlation Coefficient

Good diversification

The 3 months correlation between Graham and Acushnet is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Acushnet Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acushnet Holdings Corp 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 Acushnet Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acushnet Holdings Corp has no effect on the direction of Graham Holdings i.e., Graham Holdings and Acushnet Holdings go up and down completely randomly.

Pair Corralation between Graham Holdings and Acushnet Holdings

Considering the 90-day investment horizon Graham Holdings Co is expected to generate 0.59 times more return on investment than Acushnet Holdings. However, Graham Holdings Co is 1.69 times less risky than Acushnet Holdings. It trades about -0.02 of its potential returns per unit of risk. Acushnet Holdings Corp is currently generating about -0.07 per unit of risk. If you would invest  91,767  in Graham Holdings Co on November 27, 2024 and sell it today you would lose (622.00) from holding Graham Holdings Co or give up 0.68% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Graham Holdings Co  vs.  Acushnet Holdings Corp

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -50510
JavaScript chart by amCharts 3.21.15GHC GOLF
       Timeline  
Graham Holdings 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Graham Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical indicators, Graham Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb840860880900920940960980
Acushnet Holdings Corp 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Acushnet Holdings Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb64666870727476

Graham Holdings and Acushnet Holdings Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.34-1.76-1.18-0.6-0.02930.521.11.682.262.84 0.080.100.120.140.160.18
JavaScript chart by amCharts 3.21.15GHC GOLF
       Returns  

Pair Trading with Graham Holdings and Acushnet Holdings

The main advantage of trading using opposite Graham Holdings and Acushnet Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, Acushnet 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 Acushnet Holdings will offset losses from the drop in Acushnet Holdings' long position.
The idea behind Graham Holdings Co and Acushnet Holdings Corp pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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