Correlation Between Grand Canyon and Hartford Financial
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Hartford Financial 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 Hartford Financial 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 The Hartford Financial, you can compare the effects of market volatilities on Grand Canyon and Hartford Financial 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 Hartford Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Hartford Financial.
Diversification Opportunities for Grand Canyon and Hartford Financial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and Hartford is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and The Hartford Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hartford Financial 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 Hartford Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hartford Financial has no effect on the direction of Grand Canyon i.e., Grand Canyon and Hartford Financial go up and down completely randomly.
Pair Corralation between Grand Canyon and Hartford Financial
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 1.18 times more return on investment than Hartford Financial. However, Grand Canyon is 1.18 times more volatile than The Hartford Financial. It trades about 0.06 of its potential returns per unit of risk. The Hartford Financial is currently generating about 0.07 per unit of risk. If you would invest 9,980 in Grand Canyon Education on September 12, 2024 and sell it today you would earn a total of 5,920 from holding Grand Canyon Education or generate 59.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. The Hartford Financial
Performance |
| Timeline |
| Grand Canyon Education |
| The Hartford Financial |
Grand Canyon and Hartford Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Hartford Financial
The main advantage of trading using opposite Grand Canyon and Hartford Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Hartford Financial 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 Hartford Financial will offset losses from the drop in Hartford Financial's long position.| Grand Canyon vs. TRAVEL LEISURE DL 01 | Grand Canyon vs. AGNC INVESTMENT | Grand Canyon vs. ECHO INVESTMENT ZY | Grand Canyon vs. InPlay Oil Corp |
| Hartford Financial vs. Transport International Holdings | Hartford Financial vs. Grand Canyon Education | Hartford Financial vs. SPORTING | Hartford Financial vs. Xinhua Winshare Publishing |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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