Correlation Between Golden Sun and Graham Holdings

Can any of the company-specific risk be diversified away by investing in both Golden Sun and Graham Holdings 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 Golden Sun and Graham Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Golden Sun Education and Graham Holdings Co, you can compare the effects of market volatilities on Golden Sun and Graham Holdings 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 Golden Sun with a short position of Graham Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golden Sun and Graham Holdings.

Diversification Opportunities for Golden Sun and Graham Holdings

-0.55

Correlation Coefficient

Golden Sun  Graham Holdings

Excellent diversification

The 3 months correlation between Golden and Graham is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Golden Sun Education and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and Golden Sun 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 Golden Sun Education are associated (or correlated) with Graham Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graham Holdings has no effect on the direction of Golden Sun i.e., Golden Sun and Graham Holdings go up and down completely randomly.

Pair Corralation between Golden Sun and Graham Holdings

Given the investment horizon of 90 days Golden Sun Education is expected to generate 3.17 times more return on investment than Graham Holdings. However, Golden Sun is 3.17 times more volatile than Graham Holdings Co. It trades about -0.01 of its potential returns per unit of risk. Graham Holdings Co is currently generating about -0.22 per unit of risk. If you would invest  302.00  in Golden Sun Education on October 9, 2024 and sell it today you would lose (12.00) from holding Golden Sun Education or give up 3.97% of portfolio value over 90 days.

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

Golden Sun Education  vs.  Graham Holdings Co

Golden Sun Education

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Golden Sun Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Graham Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Graham Holdings may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Golden Sun and Graham Holdings

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

The idea behind Golden Sun Education and Graham Holdings Co 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.