Correlation Between Grand Canyon and INSURANCE AUST
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and INSURANCE AUST 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 INSURANCE AUST 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 INSURANCE AUST GRP, you can compare the effects of market volatilities on Grand Canyon and INSURANCE AUST 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 INSURANCE AUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and INSURANCE AUST.
Diversification Opportunities for Grand Canyon and INSURANCE AUST
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grand and INSURANCE is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and INSURANCE AUST GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INSURANCE AUST GRP 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 INSURANCE AUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INSURANCE AUST GRP has no effect on the direction of Grand Canyon i.e., Grand Canyon and INSURANCE AUST go up and down completely randomly.
Pair Corralation between Grand Canyon and INSURANCE AUST
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 0.88 times more return on investment than INSURANCE AUST. However, Grand Canyon Education is 1.14 times less risky than INSURANCE AUST. It trades about -0.08 of its potential returns per unit of risk. INSURANCE AUST GRP is currently generating about -0.07 per unit of risk. If you would invest 15,900 in Grand Canyon Education on October 1, 2024 and sell it today you would lose (300.00) from holding Grand Canyon Education or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. INSURANCE AUST GRP
Performance |
| Timeline |
| Grand Canyon Education |
| INSURANCE AUST GRP |
Grand Canyon and INSURANCE AUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and INSURANCE AUST
The main advantage of trading using opposite Grand Canyon and INSURANCE AUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, INSURANCE AUST 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 INSURANCE AUST will offset losses from the drop in INSURANCE AUST's long position.| Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |