Correlation Between Grand Canyon and BW OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and BW OFFSHORE 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 BW OFFSHORE 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 BW OFFSHORE LTD, you can compare the effects of market volatilities on Grand Canyon and BW OFFSHORE 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 BW OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and BW OFFSHORE.
Diversification Opportunities for Grand Canyon and BW OFFSHORE
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and XY81 is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and BW OFFSHORE LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BW OFFSHORE LTD 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 BW OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BW OFFSHORE LTD has no effect on the direction of Grand Canyon i.e., Grand Canyon and BW OFFSHORE go up and down completely randomly.
Pair Corralation between Grand Canyon and BW OFFSHORE
Assuming the 90 days trading horizon Grand Canyon Education is expected to generate 0.83 times more return on investment than BW OFFSHORE. However, Grand Canyon Education is 1.21 times less risky than BW OFFSHORE. It trades about 0.09 of its potential returns per unit of risk. BW OFFSHORE LTD is currently generating about 0.0 per unit of risk. If you would invest 12,600 in Grand Canyon Education on September 24, 2024 and sell it today you would earn a total of 2,900 from holding Grand Canyon Education or generate 23.02% 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. BW OFFSHORE LTD
Performance |
| Timeline |
| Grand Canyon Education |
| BW OFFSHORE LTD |
Grand Canyon and BW OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and BW OFFSHORE
The main advantage of trading using opposite Grand Canyon and BW OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, BW OFFSHORE 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 BW OFFSHORE will offset losses from the drop in BW OFFSHORE's long position.| Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc | Grand Canyon vs. Apple Inc |
| BW OFFSHORE vs. Grand Canyon Education | BW OFFSHORE vs. Gamma Communications plc | BW OFFSHORE vs. CHINA EDUCATION GROUP | BW OFFSHORE vs. INTERSHOP Communications Aktiengesellschaft |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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