Correlation Between Grand Canyon and XLMedia PLC
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC, you can compare the effects of market volatilities on Grand Canyon and XLMedia PLC 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 XLMedia PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and XLMedia PLC.
Diversification Opportunities for Grand Canyon and XLMedia PLC
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and XLMedia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and XLMedia PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XLMedia PLC 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 XLMedia PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XLMedia PLC has no effect on the direction of Grand Canyon i.e., Grand Canyon and XLMedia PLC go up and down completely randomly.
Pair Corralation between Grand Canyon and XLMedia PLC
Assuming the 90 days trading horizon Grand Canyon is expected to generate 1.33 times less return on investment than XLMedia PLC. But when comparing it to its historical volatility, Grand Canyon Education is 3.93 times less risky than XLMedia PLC. It trades about 0.06 of its potential returns per unit of risk. XLMedia PLC is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 18.00 in XLMedia PLC on August 28, 2024 and sell it today you would lose (4.00) from holding XLMedia PLC or give up 22.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. XLMedia PLC
Performance |
| Timeline |
| Grand Canyon Education |
| XLMedia PLC |
Grand Canyon and XLMedia PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and XLMedia PLC
The main advantage of trading using opposite Grand Canyon and XLMedia PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, XLMedia PLC 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 XLMedia PLC will offset losses from the drop in XLMedia PLC's long position.| Grand Canyon vs. Southwest Airlines Co | Grand Canyon vs. Gamma Communications plc | Grand Canyon vs. Singapore Airlines Limited | Grand Canyon vs. INTERSHOP Communications Aktiengesellschaft |
| XLMedia PLC vs. Grand Canyon Education | XLMedia PLC vs. CHINA EDUCATION GROUP | XLMedia PLC vs. CNVISION MEDIA | XLMedia PLC vs. Flutter Entertainment PLC |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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