Correlation Between Grand Canyon and Westinghouse Air
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Westinghouse Air 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 Westinghouse Air 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 Westinghouse Air Brake, you can compare the effects of market volatilities on Grand Canyon and Westinghouse Air 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 Westinghouse Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Westinghouse Air.
Diversification Opportunities for Grand Canyon and Westinghouse Air
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Grand and Westinghouse is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Westinghouse Air Brake in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westinghouse Air Brake 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 Westinghouse Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westinghouse Air Brake has no effect on the direction of Grand Canyon i.e., Grand Canyon and Westinghouse Air go up and down completely randomly.
Pair Corralation between Grand Canyon and Westinghouse Air
Assuming the 90 days trading horizon Grand Canyon is expected to generate 1.47 times less return on investment than Westinghouse Air. In addition to that, Grand Canyon is 1.42 times more volatile than Westinghouse Air Brake. It trades about 0.2 of its total potential returns per unit of risk. Westinghouse Air Brake is currently generating about 0.43 per unit of volatility. If you would invest 18,600 in Westinghouse Air Brake on November 4, 2024 and sell it today you would earn a total of 1,610 from holding Westinghouse Air Brake or generate 8.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Westinghouse Air Brake
Performance |
| Timeline |
| Grand Canyon Education |
| Westinghouse Air Brake |
Grand Canyon and Westinghouse Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Westinghouse Air
The main advantage of trading using opposite Grand Canyon and Westinghouse Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Westinghouse Air 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 Westinghouse Air will offset losses from the drop in Westinghouse Air's long position.| Grand Canyon vs. Verizon Communications | Grand Canyon vs. Apollo Investment Corp | Grand Canyon vs. MGIC INVESTMENT | Grand Canyon vs. Ribbon Communications |
| Westinghouse Air vs. CN MODERN DAIRY | Westinghouse Air vs. National Beverage Corp | Westinghouse Air vs. PLANT VEDA FOODS | Westinghouse Air vs. China Resources Beer |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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