Correlation Between Grand Canyon and SPORTING
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and SPORTING 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 SPORTING 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 SPORTING, you can compare the effects of market volatilities on Grand Canyon and SPORTING 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 SPORTING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and SPORTING.
Diversification Opportunities for Grand Canyon and SPORTING
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and SPORTING is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and SPORTING in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPORTING 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 SPORTING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPORTING has no effect on the direction of Grand Canyon i.e., Grand Canyon and SPORTING go up and down completely randomly.
Pair Corralation between Grand Canyon and SPORTING
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 0.66 times more return on investment than SPORTING. However, Grand Canyon Education is 1.52 times less risky than SPORTING. It trades about 0.47 of its potential returns per unit of risk. SPORTING is currently generating about -0.1 per unit of risk. If you would invest 15,300 in Grand Canyon Education on November 8, 2024 and sell it today you would earn a total of 2,000 from holding Grand Canyon Education or generate 13.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. SPORTING
Performance |
| Timeline |
| Grand Canyon Education |
| SPORTING |
Grand Canyon and SPORTING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and SPORTING
The main advantage of trading using opposite Grand Canyon and SPORTING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, SPORTING 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 SPORTING will offset losses from the drop in SPORTING's long position.| Grand Canyon vs. PLAYTIKA HOLDING DL 01 | Grand Canyon vs. Columbia Sportswear | Grand Canyon vs. Aristocrat Leisure Limited | Grand Canyon vs. Playa Hotels Resorts |
| SPORTING vs. CORNISH METALS INC | SPORTING vs. LG Electronics | SPORTING vs. GALENA MINING LTD | SPORTING vs. NISSAN CHEMICAL IND |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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