Correlation Between Grand Canyon and Keyence
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Keyence 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 Keyence 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 Keyence, you can compare the effects of market volatilities on Grand Canyon and Keyence 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 Keyence. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Keyence.
Diversification Opportunities for Grand Canyon and Keyence
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Grand and Keyence is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Keyence in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keyence 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 Keyence. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keyence has no effect on the direction of Grand Canyon i.e., Grand Canyon and Keyence go up and down completely randomly.
Pair Corralation between Grand Canyon and Keyence
Assuming the 90 days trading horizon Grand Canyon Education is expected to under-perform the Keyence. In addition to that, Grand Canyon is 1.21 times more volatile than Keyence. It trades about -0.23 of its total potential returns per unit of risk. Keyence is currently generating about -0.15 per unit of volatility. If you would invest 39,830 in Keyence on December 9, 2024 and sell it today you would lose (1,960) from holding Keyence or give up 4.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Keyence
Performance |
| Timeline |
| Grand Canyon Education |
| Keyence |
Grand Canyon and Keyence Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Keyence
The main advantage of trading using opposite Grand Canyon and Keyence positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Keyence 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 Keyence will offset losses from the drop in Keyence's long position.| Grand Canyon vs. Chuangs China Investments | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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