Correlation Between Klckner Co and Grand Canyon
Can any of the company-specific risk be diversified away by investing in both Klckner Co 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 Klckner Co and Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Klckner Co SE and Grand Canyon Education, you can compare the effects of market volatilities on Klckner Co 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 Klckner Co with a short position of Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Klckner Co and Grand Canyon.
Diversification Opportunities for Klckner Co and Grand Canyon
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Klckner and Grand is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Klckner Co SE 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 Klckner Co 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 Klckner Co SE 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 Klckner Co i.e., Klckner Co and Grand Canyon go up and down completely randomly.
Pair Corralation between Klckner Co and Grand Canyon
Assuming the 90 days horizon Klckner Co SE is expected to under-perform the Grand Canyon. But the stock apears to be less risky and, when comparing its historical volatility, Klckner Co SE is 1.48 times less risky than Grand Canyon. The stock trades about -0.05 of its potential returns per unit of risk. The Grand Canyon Education is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 12,800 in Grand Canyon Education on August 28, 2024 and sell it today you would earn a total of 3,200 from holding Grand Canyon Education or generate 25.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Klckner Co SE vs. Grand Canyon Education
Performance |
| Timeline |
| Klckner Co SE |
| Grand Canyon Education |
Klckner Co and Grand Canyon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Klckner Co and Grand Canyon
The main advantage of trading using opposite Klckner Co and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Klckner Co 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.| Klckner Co vs. Choice Hotels International | Klckner Co vs. Beazer Homes USA | Klckner Co vs. HYATT HOTELS A | Klckner Co vs. KB HOME |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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