Correlation Between Grand Canyon and T Mobile
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and T Mobile 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 T Mobile 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 T Mobile, you can compare the effects of market volatilities on Grand Canyon and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and T Mobile.
Diversification Opportunities for Grand Canyon and T Mobile
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Grand and TM5 is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of Grand Canyon i.e., Grand Canyon and T Mobile go up and down completely randomly.
Pair Corralation between Grand Canyon and T Mobile
Assuming the 90 days trading horizon Grand Canyon Education is expected to under-perform the T Mobile. But the stock apears to be less risky and, when comparing its historical volatility, Grand Canyon Education is 1.36 times less risky than T Mobile. The stock trades about -0.33 of its potential returns per unit of risk. The T Mobile is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest 25,498 in T Mobile on December 23, 2024 and sell it today you would lose (1,998) from holding T Mobile or give up 7.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. T Mobile
Performance |
| Timeline |
| Grand Canyon Education |
| T Mobile |
Grand Canyon and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and T Mobile
The main advantage of trading using opposite Grand Canyon and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.| Grand Canyon vs. BJs Wholesale Club | Grand Canyon vs. NH HOTEL GROUP | Grand Canyon vs. RETAIL FOOD GROUP | Grand Canyon vs. Fast Retailing Co |
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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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