Correlation Between Grand Canyon and SYSTEMAIR

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

Diversification Opportunities for Grand Canyon and SYSTEMAIR

0.38

Correlation Coefficient

Grand Canyon  SYSTEMAIR

Weak diversification

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

Pair Corralation between Grand Canyon and SYSTEMAIR

Assuming the 90 days trading horizon Grand Canyon Education is expected to under-perform the SYSTEMAIR. But the stock apears to be less risky and, when comparing its historical volatility, Grand Canyon Education is 1.09 times less risky than SYSTEMAIR. The stock trades about -0.06 of its potential returns per unit of risk. The SYSTEMAIR AB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  699.00  in SYSTEMAIR AB on April 24, 2025 and sell it today you would earn a total of  133.00  from holding SYSTEMAIR AB or generate 19.03% return on investment over 90 days.

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

Grand Canyon Education  vs.  SYSTEMAIR AB

Grand Canyon Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days Grand Canyon Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

SYSTEMAIR AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SYSTEMAIR AB are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, SYSTEMAIR reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grand Canyon and SYSTEMAIR

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

The idea behind Grand Canyon Education and SYSTEMAIR AB 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.