Correlation Between Adriatic Metals and Grand Canyon

Can any of the company-specific risk be diversified away by investing in both Adriatic Metals and Grand Canyon 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 Adriatic Metals and Grand Canyon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Adriatic Metals Plc and Grand Canyon Education, you can compare the effects of market volatilities on Adriatic Metals and Grand Canyon 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 Adriatic Metals with a short position of Grand Canyon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adriatic Metals and Grand Canyon.

Diversification Opportunities for Adriatic Metals and Grand Canyon

0.29

Correlation Coefficient

Adriatic Metals  Grand Canyon

Modest diversification

The 3 months correlation between Adriatic and Grand is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Adriatic Metals Plc and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education and Adriatic Metals 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 Adriatic Metals Plc are associated (or correlated) with Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Adriatic Metals i.e., Adriatic Metals and Grand Canyon go up and down completely randomly.

Pair Corralation between Adriatic Metals and Grand Canyon

Assuming the 90 days horizon Adriatic Metals Plc is expected to generate 1.69 times more return on investment than Grand Canyon. However, Adriatic Metals is 1.69 times more volatile than Grand Canyon Education. It trades about 0.07 of its potential returns per unit of risk. Grand Canyon Education is currently generating about -0.01 per unit of risk. If you would invest  236.00  in Adriatic Metals Plc on December 21, 2024 and sell it today you would earn a total of  22.00  from holding Adriatic Metals Plc or generate 9.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.31%
Values	Daily Returns

Adriatic Metals Plc  vs.  Grand Canyon Education

Adriatic Metals Plc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Adriatic Metals Plc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Adriatic Metals may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Grand Canyon Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grand Canyon Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Grand Canyon is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Adriatic Metals and Grand Canyon

The main advantage of trading using opposite Adriatic Metals and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adriatic Metals position performs unexpectedly, Grand Canyon 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 Grand Canyon will offset losses from the drop in Grand Canyon's long position.

The idea behind Adriatic Metals Plc and Grand Canyon Education pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.