Correlation Between Grand Canyon and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Grand Canyon and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on Grand Canyon and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Canyon and Strategic Education.
Diversification Opportunities for Grand Canyon and Strategic Education
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Grand and Strategic is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Grand Canyon i.e., Grand Canyon and Strategic Education go up and down completely randomly.
Pair Corralation between Grand Canyon and Strategic Education
Given the investment horizon of 90 days Grand Canyon Education is expected to generate 0.8 times more return on investment than Strategic Education. However, Grand Canyon Education is 1.26 times less risky than Strategic Education. It trades about 0.06 of its potential returns per unit of risk. Strategic Education is currently generating about 0.04 per unit of risk. If you would invest 10,803 in Grand Canyon Education on August 27, 2024 and sell it today you would earn a total of 5,842 from holding Grand Canyon Education or generate 54.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Canyon Education vs. Strategic Education
Performance |
| Timeline |
| Grand Canyon Education |
| Strategic Education |
Grand Canyon and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Canyon and Strategic Education
The main advantage of trading using opposite Grand Canyon and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Canyon position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Grand Canyon vs. American Public Education | Grand Canyon vs. Lincoln Educational Services | Grand Canyon vs. Adtalem Global Education |
| Strategic Education vs. Element Solutions | Strategic Education vs. DoubleVerify Holdings | Strategic Education vs. CECO Environmental Corp | Strategic Education vs. American Public 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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