Correlation Between SPORT LISBOA and Graham Holdings

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

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

Diversification Opportunities for SPORT LISBOA and Graham Holdings

-0.13

Correlation Coefficient

SPORT LISBOA  Graham Holdings

Good diversification

The 3 months correlation between SPORT and Graham is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding SPORT LISBOA E and Graham Holdings Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graham Holdings and SPORT LISBOA 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 SPORT LISBOA E 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 SPORT LISBOA i.e., SPORT LISBOA and Graham Holdings go up and down completely randomly.

Pair Corralation between SPORT LISBOA and Graham Holdings

Assuming the 90 days horizon SPORT LISBOA E is expected to generate 2.47 times more return on investment than Graham Holdings. However, SPORT LISBOA is 2.47 times more volatile than Graham Holdings Co. It trades about 0.17 of its potential returns per unit of risk. Graham Holdings Co is currently generating about 0.04 per unit of risk. If you would invest  370.00  in SPORT LISBOA E on April 21, 2025 and sell it today you would earn a total of  174.00  from holding SPORT LISBOA E or generate 47.03% return on investment over 90 days.

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

SPORT LISBOA E  vs.  Graham Holdings Co

SPORT LISBOA E

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SPORT LISBOA E are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, SPORT LISBOA reported solid returns over the last few months and may actually be approaching a breakup point.

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 SPORT LISBOA and Graham Holdings

The main advantage of trading using opposite SPORT LISBOA and Graham Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPORT LISBOA 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 SPORT LISBOA E 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.