Correlation Between Graham Holdings and Aspen

Can any of the company-specific risk be diversified away by investing in both Graham Holdings and Aspen 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 Aspen 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 Aspen Group, you can compare the effects of market volatilities on Graham Holdings and Aspen 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 Aspen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Aspen.

Diversification Opportunities for Graham Holdings and Aspen

-0.44

Correlation Coefficient

Graham Holdings  Aspen

Very good diversification

The 3 months correlation between Graham and Aspen is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Aspen Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Group 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 Aspen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Group has no effect on the direction of Graham Holdings i.e., Graham Holdings and Aspen go up and down completely randomly.

Pair Corralation between Graham Holdings and Aspen

If you would invest  87,224  in Graham Holdings Co on October 22, 2024 and sell it today you would earn a total of  3,326  from holding Graham Holdings Co or generate 3.81% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	5.26%
Values	Daily Returns

Graham Holdings Co  vs.  Aspen Group

Graham Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Graham Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Aspen Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aspen Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Aspen 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 Graham Holdings and Aspen

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

The idea behind Graham Holdings Co and Aspen Group 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.