Correlation Between Grand Canyon and SIKA AG
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and SIKA AG 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 SIKA AG 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 SIKA AG UNSPADR, you can compare the effects of market volatilities on Grand Canyon and SIKA AG 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 SIKA AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and SIKA AG.
Diversification Opportunities for Grand Canyon and SIKA AG
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and SIKA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and SIKA AG UNSPADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIKA AG UNSPADR 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 SIKA AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIKA AG UNSPADR has no effect on the direction of Grand Canyon i.e., Grand Canyon and SIKA AG go up and down completely randomly.
Pair Corralation between Grand Canyon and SIKA AG
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 2.43 times more return on investment than SIKA AG. However, Grand Canyon is 2.43 times more volatile than SIKA AG UNSPADR. It trades about 0.3 of its potential returns per unit of risk. SIKA AG UNSPADR is currently generating about -0.29 per unit of risk. If you would invest 12,200 in Grand Canyon Education on August 30, 2024 and sell it today you would earn a total of 3,300 from holding Grand Canyon Education or generate 27.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. SIKA AG UNSPADR
Performance |
| Timeline |
| Grand Canyon Education |
| SIKA AG UNSPADR |
Grand Canyon and SIKA AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and SIKA AG
The main advantage of trading using opposite Grand Canyon and SIKA AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, SIKA AG 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 SIKA AG will offset losses from the drop in SIKA AG's long position.| Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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