Correlation Between Grand Canyon and XTANT MEDICAL
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and XTANT MEDICAL 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 XTANT MEDICAL 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 XTANT MEDICAL HLDGS, you can compare the effects of market volatilities on Grand Canyon and XTANT MEDICAL 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 XTANT MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and XTANT MEDICAL.
Diversification Opportunities for Grand Canyon and XTANT MEDICAL
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and XTANT is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and XTANT MEDICAL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XTANT MEDICAL HLDGS 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 XTANT MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XTANT MEDICAL HLDGS has no effect on the direction of Grand Canyon i.e., Grand Canyon and XTANT MEDICAL go up and down completely randomly.
Pair Corralation between Grand Canyon and XTANT MEDICAL
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 0.69 times more return on investment than XTANT MEDICAL. However, Grand Canyon Education is 1.46 times less risky than XTANT MEDICAL. It trades about -0.1 of its potential returns per unit of risk. XTANT MEDICAL HLDGS is currently generating about -0.13 per unit of risk. If you would invest 16,000 in Grand Canyon Education on September 24, 2024 and sell it today you would lose (500.00) from holding Grand Canyon Education or give up 3.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. XTANT MEDICAL HLDGS
Performance |
| Timeline |
| Grand Canyon Education |
| XTANT MEDICAL HLDGS |
Grand Canyon and XTANT MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and XTANT MEDICAL
The main advantage of trading using opposite Grand Canyon and XTANT MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, XTANT MEDICAL 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 XTANT MEDICAL will offset losses from the drop in XTANT MEDICAL's long position.| Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc |
| XTANT MEDICAL vs. SHIN ETSU CHEMICAL | XTANT MEDICAL vs. SEKISUI CHEMICAL | XTANT MEDICAL vs. Soken Chemical Engineering | XTANT MEDICAL vs. Silicon Motion Technology |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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