Correlation Between Graham Holdings and EMBARK EDUCATION
Can any of the company-specific risk be diversified away by investing in both Graham Holdings and EMBARK 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 Graham Holdings and EMBARK EDUCATION into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graham Holdings Co and EMBARK EDUCATION LTD, you can compare the effects of market volatilities on Graham Holdings and EMBARK 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 Graham Holdings with a short position of EMBARK EDUCATION. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and EMBARK EDUCATION.
Diversification Opportunities for Graham Holdings and EMBARK EDUCATION
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Graham and EMBARK is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and EMBARK EDUCATION LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMBARK EDUCATION LTD and Graham Holdings 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 Graham Holdings Co are associated (or correlated) with EMBARK EDUCATION. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMBARK EDUCATION LTD has no effect on the direction of Graham Holdings i.e., Graham Holdings and EMBARK EDUCATION go up and down completely randomly.
Pair Corralation between Graham Holdings and EMBARK EDUCATION
Assuming the 90 days trading horizon Graham Holdings Co is expected to generate 4.31 times more return on investment than EMBARK EDUCATION. However, Graham Holdings is 4.31 times more volatile than EMBARK EDUCATION LTD. It trades about 0.35 of its potential returns per unit of risk. EMBARK EDUCATION LTD is currently generating about 0.22 per unit of risk. If you would invest 71,000 in Graham Holdings Co on August 28, 2024 and sell it today you would earn a total of 17,500 from holding Graham Holdings Co or generate 24.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graham Holdings Co vs. EMBARK EDUCATION LTD
Performance |
| Timeline |
| Graham Holdings |
| EMBARK EDUCATION LTD |
Graham Holdings and EMBARK EDUCATION Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graham Holdings and EMBARK EDUCATION
The main advantage of trading using opposite Graham Holdings and EMBARK EDUCATION positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graham Holdings position performs unexpectedly, EMBARK 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 EMBARK EDUCATION will offset losses from the drop in EMBARK EDUCATION's long position.| Graham Holdings vs. VARIOUS EATERIES LS | Graham Holdings vs. MCEWEN MINING INC | Graham Holdings vs. Perseus Mining Limited | Graham Holdings vs. ETFS Coffee ETC |
| EMBARK EDUCATION vs. Motorcar Parts of | EMBARK EDUCATION vs. CPU SOFTWAREHOUSE | EMBARK EDUCATION vs. AXWAY SOFTWARE EO | EMBARK EDUCATION vs. AGF Management Limited |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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