Correlation Between Grand Canyon and WAGNERS HOLDING
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and WAGNERS HOLDING 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 WAGNERS HOLDING 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 WAGNERS HOLDING LTD, you can compare the effects of market volatilities on Grand Canyon and WAGNERS HOLDING 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 WAGNERS HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and WAGNERS HOLDING.
Diversification Opportunities for Grand Canyon and WAGNERS HOLDING
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grand and WAGNERS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and WAGNERS HOLDING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WAGNERS HOLDING LTD 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 WAGNERS HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WAGNERS HOLDING LTD has no effect on the direction of Grand Canyon i.e., Grand Canyon and WAGNERS HOLDING go up and down completely randomly.
Pair Corralation between Grand Canyon and WAGNERS HOLDING
Assuming the 90 days trading horizon Grand Canyon is expected to generate 1.95 times less return on investment than WAGNERS HOLDING. But when comparing it to its historical volatility, Grand Canyon Education is 2.33 times less risky than WAGNERS HOLDING. It trades about 0.06 of its potential returns per unit of risk. WAGNERS HOLDING LTD is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 47.00 in WAGNERS HOLDING LTD on October 15, 2024 and sell it today you would earn a total of 35.00 from holding WAGNERS HOLDING LTD or generate 74.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. WAGNERS HOLDING LTD
Performance |
| Timeline |
| Grand Canyon Education |
| WAGNERS HOLDING LTD |
Grand Canyon and WAGNERS HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and WAGNERS HOLDING
The main advantage of trading using opposite Grand Canyon and WAGNERS HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, WAGNERS HOLDING 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 WAGNERS HOLDING will offset losses from the drop in WAGNERS HOLDING's long position.| Grand Canyon vs. EVS Broadcast Equipment | Grand Canyon vs. COPLAND ROAD CAPITAL | Grand Canyon vs. PLANT VEDA FOODS | Grand Canyon vs. QUEEN S ROAD |
| WAGNERS HOLDING vs. Daikin IndustriesLtd | WAGNERS HOLDING vs. Vulcan Materials | WAGNERS HOLDING vs. Heidelberg Materials AG |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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