Correlation Between Grand Canyon and Stride

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

Diversification Opportunities for Grand Canyon and Stride

0.82

Correlation Coefficient

Grand Canyon  Stride

Very poor diversification

The 3 months correlation between Grand and Stride is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and Stride Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stride 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 Stride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stride Inc has no effect on the direction of Grand Canyon i.e., Grand Canyon and Stride go up and down completely randomly.

Pair Corralation between Grand Canyon and Stride

Given the investment horizon of 90 days Grand Canyon is expected to generate 2.29 times less return on investment than Stride. But when comparing it to its historical volatility, Grand Canyon Education is 2.31 times less risky than Stride. It trades about 0.11 of its potential returns per unit of risk. Stride Inc is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  8,072  in Stride Inc on September 1, 2024 and sell it today you would earn a total of  2,615  from holding Stride Inc or generate 32.4% return on investment over 90 days.

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

Grand Canyon Education  vs.  Stride 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.

Stride Inc

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with Grand Canyon and Stride

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

The idea behind Grand Canyon Education and Stride 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.