Correlation Between Golden Sun and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both Golden Sun and Grand Canyon 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 Golden Sun and Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golden Sun Education and Grand Canyon Education, you can compare the effects of market volatilities on Golden Sun and Grand Canyon 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 Golden Sun with a short position of Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Sun and Grand Canyon.
Diversification Opportunities for Golden Sun and Grand Canyon
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golden and Grand is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education and Golden Sun 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 Golden Sun Education are associated (or correlated) with Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Golden Sun i.e., Golden Sun and Grand Canyon go up and down completely randomly.
Pair Corralation between Golden Sun and Grand Canyon
Given the investment horizon of 90 days Golden Sun is expected to generate 1.79 times less return on investment than Grand Canyon. In addition to that, Golden Sun is 5.45 times more volatile than Grand Canyon Education. It trades about 0.01 of its total potential returns per unit of risk. Grand Canyon Education is currently generating about 0.08 per unit of volatility. If you would invest 11,653 in Grand Canyon Education on September 4, 2024 and sell it today you would earn a total of 5,056 from holding Grand Canyon Education or generate 43.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golden Sun Education vs. Grand Canyon Education
Performance |
| Timeline |
| Golden Sun Education |
| Grand Canyon Education |
Golden Sun and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golden Sun and Grand Canyon
The main advantage of trading using opposite Golden Sun and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golden Sun position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.| Golden Sun vs. Wah Fu Education | Golden Sun vs. QuantaSing Group Limited | Golden Sun vs. Genius Group | Golden Sun vs. China Liberal Education |
| Grand Canyon vs. Lincoln Educational Services | Grand Canyon vs. Adtalem Global Education | Grand Canyon vs. Strategic Education | Grand Canyon vs. Laureate Education |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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