Correlation Between Grand Canyon and USWE SPORTS
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and USWE SPORTS 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 USWE SPORTS 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 USWE SPORTS AB, you can compare the effects of market volatilities on Grand Canyon and USWE SPORTS 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 USWE SPORTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and USWE SPORTS.
Diversification Opportunities for Grand Canyon and USWE SPORTS
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grand and USWE is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and USWE SPORTS AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on USWE SPORTS AB 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 USWE SPORTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of USWE SPORTS AB has no effect on the direction of Grand Canyon i.e., Grand Canyon and USWE SPORTS go up and down completely randomly.
Pair Corralation between Grand Canyon and USWE SPORTS
Assuming the 90 days trading horizon Grand Canyon is expected to generate 1.07 times less return on investment than USWE SPORTS. But when comparing it to its historical volatility, Grand Canyon Education is 1.23 times less risky than USWE SPORTS. It trades about 0.3 of its potential returns per unit of risk. USWE SPORTS AB is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 60.00 in USWE SPORTS AB on August 24, 2024 and sell it today you would earn a total of 16.00 from holding USWE SPORTS AB or generate 26.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
Grand Canyon Education vs. USWE SPORTS AB
Performance |
| Timeline |
| Grand Canyon Education |
| USWE SPORTS AB |
Grand Canyon and USWE SPORTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and USWE SPORTS
The main advantage of trading using opposite Grand Canyon and USWE SPORTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, USWE SPORTS 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 USWE SPORTS will offset losses from the drop in USWE SPORTS's long position.| Grand Canyon vs. FUYO GENERAL LEASE | Grand Canyon vs. Zijin Mining Group | Grand Canyon vs. LION ONE METALS | Grand Canyon vs. MCEWEN MINING INC |
| USWE SPORTS vs. Addus HomeCare | USWE SPORTS vs. Tri Pointe Homes | USWE SPORTS vs. HomeToGo SE | USWE SPORTS vs. LG Display Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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