Correlation Between Graham Holdings and Hailiang Edu

By analyzing existing cross correlation between Graham Holdings and Hailiang Edu Grp, you can compare the effects of market volatilities on Graham Holdings and Hailiang Edu 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 Hailiang Edu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graham Holdings and Hailiang Edu.

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

Diversification Opportunities for Graham Holdings and Hailiang Edu

0.24
  Correlation Coefficient
Graham Holdings
Hailiang Edu Grp

Modest diversification

The 3 months correlation between Graham and Hailiang is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings and Hailiang Edu Grp in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Hailiang Edu Grp 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 are associated (or correlated) with Hailiang Edu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hailiang Edu Grp has no effect on the direction of Graham Holdings i.e., Graham Holdings and Hailiang Edu go up and down completely randomly.

Pair Corralation between Graham Holdings and Hailiang Edu

Considering the 90-day investment horizon Graham Holdings is expected to generate 0.48 times more return on investment than Hailiang Edu. However, Graham Holdings is 2.09 times less risky than Hailiang Edu. It trades about 0.03 of its potential returns per unit of risk. Hailiang Edu Grp is currently generating about -0.58 per unit of risk. If you would invest  59,484  in Graham Holdings on September 7, 2021 and sell it today you would earn a total of  408.00  from holding Graham Holdings or generate 0.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Graham Holdings  vs.  Hailiang Edu Grp

 Performance (%) 
      Timeline 
Graham Holdings 
Graham Performance
0 of 100
Over the last 90 days Graham Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical indicators, Graham Holdings is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Graham Price Channel

Hailiang Edu Grp 
Hailiang Performance
0 of 100
Over the last 90 days Hailiang Edu Grp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2022. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Hailiang Price Channel

Graham Holdings and Hailiang Edu Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Graham Holdings and Hailiang Edu

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

Graham Holdings

Pair trading matchups for Graham Holdings

The idea behind Graham Holdings and Hailiang Edu Grp 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.
Check out your portfolio center. 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.

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