Correlation Between IDP EDUCATION and Graham Holdings

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

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

Diversification Opportunities for IDP EDUCATION and Graham Holdings

0.41

Correlation Coefficient

IDP EDUCATION  Graham Holdings

Very weak diversification

The 3 months correlation between IDP and Graham is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding IDP EDUCATION LTD and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and IDP EDUCATION 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 IDP EDUCATION LTD 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 IDP EDUCATION i.e., IDP EDUCATION and Graham Holdings go up and down completely randomly.

Pair Corralation between IDP EDUCATION and Graham Holdings

Assuming the 90 days horizon IDP EDUCATION LTD is expected to under-perform the Graham Holdings. In addition to that, IDP EDUCATION is 5.31 times more volatile than Graham Holdings Co. It trades about -0.1 of its total potential returns per unit of risk. Graham Holdings Co is currently generating about 0.03 per unit of volatility. If you would invest  75,349  in Graham Holdings Co on April 22, 2025 and sell it today you would earn a total of  1,651  from holding Graham Holdings Co or generate 2.19% return on investment over 90 days.

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

IDP EDUCATION LTD  vs.  Graham Holdings Co

IDP EDUCATION LTD

Risk-Adjusted Performance

Very Weak

Over the last 90 days IDP EDUCATION LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Graham Holdings

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graham Holdings Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Graham Holdings is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with IDP EDUCATION and Graham Holdings

The main advantage of trading using opposite IDP EDUCATION and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IDP EDUCATION 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 IDP EDUCATION LTD 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.