Correlation Between Grand Canyon and Adtalem Global
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Adtalem Global 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 Adtalem Global 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 Adtalem Global Education, you can compare the effects of market volatilities on Grand Canyon and Adtalem Global 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 Adtalem Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Adtalem Global.
Diversification Opportunities for Grand Canyon and Adtalem Global
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Grand and Adtalem is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Adtalem Global Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adtalem Global Education 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 Adtalem Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adtalem Global Education has no effect on the direction of Grand Canyon i.e., Grand Canyon and Adtalem Global go up and down completely randomly.
Pair Corralation between Grand Canyon and Adtalem Global
Given the investment horizon of 90 days Grand Canyon is expected to generate 2.4 times less return on investment than Adtalem Global. But when comparing it to its historical volatility, Grand Canyon Education is 1.52 times less risky than Adtalem Global. It trades about 0.06 of its potential returns per unit of risk. Adtalem Global Education is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,762 in Adtalem Global Education on October 19, 2024 and sell it today you would earn a total of 6,055 from holding Adtalem Global Education or generate 160.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Adtalem Global Education
Performance |
| Timeline |
| Grand Canyon Education |
| Adtalem Global Education |
Grand Canyon and Adtalem Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Adtalem Global
The main advantage of trading using opposite Grand Canyon and Adtalem Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Adtalem Global 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 Adtalem Global will offset losses from the drop in Adtalem Global's long position.| Grand Canyon vs. Lincoln Educational Services | Grand Canyon vs. Adtalem Global Education | Grand Canyon vs. Strategic Education | Grand Canyon vs. Laureate Education |
| Adtalem Global vs. Grand Canyon Education | Adtalem Global vs. Afya | Adtalem Global vs. Bright Scholar Education | Adtalem Global 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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