Correlation Between Grand Canyon and Cogna Educacao
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Cogna Educacao 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 Cogna Educacao 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 Cogna Educacao SA, you can compare the effects of market volatilities on Grand Canyon and Cogna Educacao 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 Cogna Educacao. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Cogna Educacao.
Diversification Opportunities for Grand Canyon and Cogna Educacao
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Grand and Cogna is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Cogna Educacao SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cogna Educacao SA 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 Cogna Educacao. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cogna Educacao SA has no effect on the direction of Grand Canyon i.e., Grand Canyon and Cogna Educacao go up and down completely randomly.
Pair Corralation between Grand Canyon and Cogna Educacao
Given the investment horizon of 90 days Grand Canyon Education is expected to generate 0.62 times more return on investment than Cogna Educacao. However, Grand Canyon Education is 1.63 times less risky than Cogna Educacao. It trades about 0.32 of its potential returns per unit of risk. Cogna Educacao SA is currently generating about 0.03 per unit of risk. If you would invest 13,340 in Grand Canyon Education on August 28, 2024 and sell it today you would earn a total of 3,448 from holding Grand Canyon Education or generate 25.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Cogna Educacao SA
Performance |
| Timeline |
| Grand Canyon Education |
| Cogna Educacao SA |
Grand Canyon and Cogna Educacao Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Cogna Educacao
The main advantage of trading using opposite Grand Canyon and Cogna Educacao positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Cogna Educacao 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 Cogna Educacao will offset losses from the drop in Cogna Educacao's long position.| Grand Canyon vs. American Public Education | Grand Canyon vs. Lincoln Educational Services | Grand Canyon vs. Adtalem Global Education |
| Cogna Educacao vs. Universal Technical Institute | Cogna Educacao vs. ATA Creativity Global | Cogna Educacao vs. Sunlands Technology Group | Cogna Educacao vs. Vasta Platform |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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