Correlation Between Grand Canyon and CHINA EDUCATION
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and CHINA EDUCATION 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 CHINA EDUCATION 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 CHINA EDUCATION GROUP, you can compare the effects of market volatilities on Grand Canyon and CHINA EDUCATION 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 CHINA EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and CHINA EDUCATION.
Diversification Opportunities for Grand Canyon and CHINA EDUCATION
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Grand and CHINA is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and CHINA EDUCATION GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA EDUCATION GROUP 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 CHINA EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA EDUCATION GROUP has no effect on the direction of Grand Canyon i.e., Grand Canyon and CHINA EDUCATION go up and down completely randomly.
Pair Corralation between Grand Canyon and CHINA EDUCATION
Assuming the 90 days trading horizon Grand Canyon is expected to generate 1.52 times less return on investment than CHINA EDUCATION. But when comparing it to its historical volatility, Grand Canyon Education is 2.67 times less risky than CHINA EDUCATION. It trades about 0.06 of its potential returns per unit of risk. CHINA EDUCATION GROUP is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 29.00 in CHINA EDUCATION GROUP on November 1, 2024 and sell it today you would earn a total of 12.00 from holding CHINA EDUCATION GROUP or generate 41.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. CHINA EDUCATION GROUP
Performance |
| Timeline |
| Grand Canyon Education |
| CHINA EDUCATION GROUP |
Grand Canyon and CHINA EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and CHINA EDUCATION
The main advantage of trading using opposite Grand Canyon and CHINA EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, CHINA EDUCATION 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 CHINA EDUCATION will offset losses from the drop in CHINA EDUCATION's long position.| Grand Canyon vs. Micron Technology | Grand Canyon vs. PKSHA TECHNOLOGY INC | Grand Canyon vs. NTT DATA | Grand Canyon vs. CN DATANG C |
| CHINA EDUCATION vs. QINGCI GAMES INC | CHINA EDUCATION vs. Carsales | CHINA EDUCATION vs. GameStop Corp | CHINA EDUCATION vs. TROPHY GAMES DEV |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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