Correlation Between Grand Canyon and COGNA EDUCACAO
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and COGNA EDUCACAO 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 Grand Canyon and COGNA EDUCACAO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Canyon Education and COGNA EDUCACAO SPADR, you can compare the effects of market volatilities on Grand Canyon and COGNA EDUCACAO 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 Grand Canyon with a short position of COGNA EDUCACAO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and COGNA EDUCACAO.
Diversification Opportunities for Grand Canyon and COGNA EDUCACAO
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grand and COGNA is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and COGNA EDUCACAO SPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COGNA EDUCACAO SPADR and Grand Canyon 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 Grand Canyon Education are associated (or correlated) with COGNA EDUCACAO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COGNA EDUCACAO SPADR has no effect on the direction of Grand Canyon i.e., Grand Canyon and COGNA EDUCACAO go up and down completely randomly.
Pair Corralation between Grand Canyon and COGNA EDUCACAO
Assuming the 90 days horizon Grand Canyon Education is expected to generate 0.2 times more return on investment than COGNA EDUCACAO. However, Grand Canyon Education is 5.06 times less risky than COGNA EDUCACAO. It trades about 0.19 of its potential returns per unit of risk. COGNA EDUCACAO SPADR is currently generating about -0.03 per unit of risk. If you would invest 12,100 in Grand Canyon Education on October 15, 2024 and sell it today you would earn a total of 3,500 from holding Grand Canyon Education or generate 28.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Grand Canyon Education vs. COGNA EDUCACAO SPADR
Performance |
| Timeline |
| Grand Canyon Education |
| COGNA EDUCACAO SPADR |
Grand Canyon and COGNA EDUCACAO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and COGNA EDUCACAO
The main advantage of trading using opposite Grand Canyon and COGNA EDUCACAO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, COGNA EDUCACAO 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 COGNA EDUCACAO will offset losses from the drop in COGNA EDUCACAO's long position.| Grand Canyon vs. IDP EDUCATION LTD | Grand Canyon vs. Strategic Education | Grand Canyon vs. Laureate Education | Grand Canyon vs. Superior Plus Corp |
| COGNA EDUCACAO vs. IDP EDUCATION LTD | COGNA EDUCACAO vs. Strategic Education | COGNA EDUCACAO vs. Laureate Education | COGNA EDUCACAO vs. Superior Plus Corp |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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