Correlation Between Grand Canyon and TELECOM ITALIA

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

Diversification Opportunities for Grand Canyon and TELECOM ITALIA

-0.03

Correlation Coefficient

Grand Canyon  TELECOM ITALIA

Good diversification

The 3 months correlation between Grand and TELECOM is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and TELECOM ITALIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELECOM ITALIA 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 TELECOM ITALIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELECOM ITALIA has no effect on the direction of Grand Canyon i.e., Grand Canyon and TELECOM ITALIA go up and down completely randomly.

Pair Corralation between Grand Canyon and TELECOM ITALIA

Assuming the 90 days trading horizon Grand Canyon is expected to generate 6.33 times less return on investment than TELECOM ITALIA. In addition to that, Grand Canyon is 1.06 times more volatile than TELECOM ITALIA. It trades about 0.03 of its total potential returns per unit of risk. TELECOM ITALIA is currently generating about 0.18 per unit of volatility. If you would invest  33.00  in TELECOM ITALIA on April 20, 2025 and sell it today you would earn a total of  7.00  from holding TELECOM ITALIA or generate 21.21% return on investment over 90 days.

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

Grand Canyon Education  vs.  TELECOM ITALIA

Grand Canyon Education

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Canyon Education are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Grand Canyon is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

TELECOM ITALIA

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in TELECOM ITALIA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, TELECOM ITALIA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Grand Canyon and TELECOM ITALIA

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

The idea behind Grand Canyon Education and TELECOM ITALIA 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.