Correlation Between Grand Canyon and China Liberal
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and China Liberal 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 China Liberal 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 China Liberal Education, you can compare the effects of market volatilities on Grand Canyon and China Liberal 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 China Liberal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and China Liberal.
Diversification Opportunities for Grand Canyon and China Liberal
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Grand and China is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and China Liberal Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Liberal 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 China Liberal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Liberal Education has no effect on the direction of Grand Canyon i.e., Grand Canyon and China Liberal go up and down completely randomly.
Pair Corralation between Grand Canyon and China Liberal
Given the investment horizon of 90 days Grand Canyon Education is expected to generate 1.22 times more return on investment than China Liberal. However, Grand Canyon is 1.22 times more volatile than China Liberal Education. It trades about 0.25 of its potential returns per unit of risk. China Liberal Education is currently generating about -0.43 per unit of risk. If you would invest 13,453 in Grand Canyon Education on August 24, 2024 and sell it today you would earn a total of 2,760 from holding Grand Canyon Education or generate 20.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. China Liberal Education
Performance |
| Timeline |
| Grand Canyon Education |
| China Liberal Education |
Grand Canyon and China Liberal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and China Liberal
The main advantage of trading using opposite Grand Canyon and China Liberal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, China Liberal 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 China Liberal will offset losses from the drop in China Liberal's long position.| Grand Canyon vs. Gaotu Techedu DRC | Grand Canyon vs. TAL Education Group | Grand Canyon vs. Strategic Education | Grand Canyon vs. Vasta Platform |
| China Liberal vs. Lixiang Education Holding | China Liberal vs. Four Seasons Education | China Liberal vs. Jianzhi Education Technology | China Liberal vs. Elite Education Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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