Correlation Between Grandeur Peak and Grandeur Peak

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

By analyzing existing cross correlation between Grandeur Peak Global and Grandeur Peak Stalwarts, you can compare the effects of market volatilities on Grandeur Peak and Grandeur Peak 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 Grandeur Peak with a short position of Grandeur Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grandeur Peak and Grandeur Peak.

Diversification Opportunities for Grandeur Peak and Grandeur Peak

0.97

Correlation Coefficient

Grandeur Peak  Grandeur Peak

Almost no diversification

The 3 months correlation between Grandeur and Grandeur is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Grandeur Peak Global and Grandeur Peak Stalwarts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grandeur Peak Stalwarts and Grandeur Peak 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 Grandeur Peak Global are associated (or correlated) with Grandeur Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grandeur Peak Stalwarts has no effect on the direction of Grandeur Peak i.e., Grandeur Peak and Grandeur Peak go up and down completely randomly.

Pair Corralation between Grandeur Peak and Grandeur Peak

Assuming the 90 days horizon Grandeur Peak is expected to generate 4.92 times less return on investment than Grandeur Peak. But when comparing it to its historical volatility, Grandeur Peak Global is 1.4 times less risky than Grandeur Peak. It trades about 0.01 of its potential returns per unit of risk. Grandeur Peak Stalwarts is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,724  in Grandeur Peak Stalwarts on February 20, 2024 and sell it today you would earn a total of  161.00  from holding Grandeur Peak Stalwarts or generate 9.34% return on investment over 90 days.

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

Grandeur Peak Global  vs.  Grandeur Peak Stalwarts

Grandeur Peak Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grandeur Peak Global has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Grandeur Peak is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Grandeur Peak Stalwarts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Grandeur Peak Stalwarts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Grandeur Peak is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Grandeur Peak and Grandeur Peak

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

The idea behind Grandeur Peak Global and Grandeur Peak Stalwarts 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.