Correlation Between Grand Canyon and Kingdee International
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Kingdee International 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 Kingdee International 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 Kingdee International Software, you can compare the effects of market volatilities on Grand Canyon and Kingdee International 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 Kingdee International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Kingdee International.
Diversification Opportunities for Grand Canyon and Kingdee International
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and Kingdee is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Kingdee International Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingdee International 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 Kingdee International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingdee International has no effect on the direction of Grand Canyon i.e., Grand Canyon and Kingdee International go up and down completely randomly.
Pair Corralation between Grand Canyon and Kingdee International
Assuming the 90 days trading horizon Grand Canyon is expected to generate 3.81 times less return on investment than Kingdee International. But when comparing it to its historical volatility, Grand Canyon Education is 2.13 times less risky than Kingdee International. It trades about 0.22 of its potential returns per unit of risk. Kingdee International Software is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 99.00 in Kingdee International Software on November 3, 2024 and sell it today you would earn a total of 26.00 from holding Kingdee International Software or generate 26.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Kingdee International Software
Performance |
| Timeline |
| Grand Canyon Education |
| Kingdee International |
Grand Canyon and Kingdee International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Kingdee International
The main advantage of trading using opposite Grand Canyon and Kingdee International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Kingdee International 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 Kingdee International will offset losses from the drop in Kingdee International's long position.| Grand Canyon vs. Apollo Investment Corp | Grand Canyon vs. ONWARD MEDICAL BV | Grand Canyon vs. CDL INVESTMENT | Grand Canyon vs. CHRYSALIS INVESTMENTS LTD |
| Kingdee International vs. Intuit Inc | Kingdee International vs. Palo Alto Networks | Kingdee International vs. Synopsys | Kingdee International vs. Cadence Design Systems |
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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