Correlation Between Grand Canyon and Ihuman

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

Diversification Opportunities for Grand Canyon and Ihuman

-0.38

Correlation Coefficient

Grand Canyon  Ihuman

Very good diversification

The 3 months correlation between Grand and Ihuman is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Grand Canyon i.e., Grand Canyon and Ihuman go up and down completely randomly.

Pair Corralation between Grand Canyon and Ihuman

Given the investment horizon of 90 days Grand Canyon Education is expected to generate 0.56 times more return on investment than Ihuman. However, Grand Canyon Education is 1.79 times less risky than Ihuman. It trades about 0.11 of its potential returns per unit of risk. Ihuman Inc is currently generating about 0.02 per unit of risk. If you would invest  14,325  in Grand Canyon Education on September 1, 2024 and sell it today you would earn a total of  2,134  from holding Grand Canyon Education or generate 14.9% return on investment over 90 days.

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

Grand Canyon Education  vs.  Ihuman Inc

Grand Canyon Education

Risk-Adjusted Performance

8 of 100

OK

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

Ihuman Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ihuman Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Ihuman is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Grand Canyon and Ihuman

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

The idea behind Grand Canyon Education and Ihuman Inc 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..