Correlation Between Grand Canyon and GRIFFIN MINING

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

Diversification Opportunities for Grand Canyon and GRIFFIN MINING

-0.57

Correlation Coefficient

Grand Canyon  GRIFFIN MINING

Excellent diversification

The 3 months correlation between Grand and GRIFFIN is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD 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 GRIFFIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIFFIN MINING LTD has no effect on the direction of Grand Canyon i.e., Grand Canyon and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Grand Canyon and GRIFFIN MINING

Assuming the 90 days horizon Grand Canyon Education is expected to under-perform the GRIFFIN MINING. In addition to that, Grand Canyon is 1.07 times more volatile than GRIFFIN MINING LTD. It trades about -0.04 of its total potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.01 per unit of volatility. If you would invest  174.00  in GRIFFIN MINING LTD on October 5, 2024 and sell it today you would earn a total of  0.00  from holding GRIFFIN MINING LTD or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Grand Canyon Education  vs.  GRIFFIN MINING LTD

Grand Canyon Education

Risk-Adjusted Performance

0 of 100

Good

Over the last 90 days Grand Canyon Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Grand Canyon reported solid returns over the last few months and may actually be approaching a breakup point.

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIFFIN MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GRIFFIN MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Grand Canyon and GRIFFIN MINING

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

The idea behind Grand Canyon Education and GRIFFIN MINING LTD 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.