Correlation Between Graham Holdings and Wah Fu
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Wah Fu 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 Wah Fu 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 Wah Fu Education, you can compare the effects of market volatilities on Graham Holdings and Wah Fu 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 Wah Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Wah Fu.
Diversification Opportunities for Graham Holdings and Wah Fu
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graham and Wah is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Wah Fu Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wah Fu Education 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 Wah Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wah Fu Education has no effect on the direction of Graham Holdings i.e., Graham Holdings and Wah Fu go up and down completely randomly.
Pair Corralation between Graham Holdings and Wah Fu
Considering the 90-day investment horizon Graham Holdings Co is expected to generate 1.22 times more return on investment than Wah Fu. However, Graham Holdings is 1.22 times more volatile than Wah Fu Education. It trades about 0.25 of its potential returns per unit of risk. Wah Fu Education is currently generating about -0.18 per unit of risk. If you would invest 78,025 in Graham Holdings Co on August 24, 2024 and sell it today you would earn a total of 13,780 from holding Graham Holdings Co or generate 17.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Graham Holdings Co vs. Wah Fu Education
Performance |
Timeline |
Graham Holdings |
Wah Fu Education |
Graham Holdings and Wah Fu Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Graham Holdings and Wah Fu
The main advantage of trading using opposite Graham Holdings and Wah Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, Wah Fu 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 Wah Fu will offset losses from the drop in Wah Fu's long position.Graham Holdings vs. 17 Education Technology | Graham Holdings vs. Elite Education Group | Graham Holdings vs. Wah Fu Education |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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