Correlation Between Graham Holdings and Grand Canyon

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

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

Diversification Opportunities for Graham Holdings and Grand Canyon

0.82

Correlation Coefficient

Graham Holdings  Grand Canyon

Very poor diversification

The 3 months correlation between Graham and Grand is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Graham Holdings Co and Grand Canyon Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand Canyon Education and Graham Holdings 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 Graham Holdings Co are associated (or correlated) with Grand Canyon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand Canyon Education has no effect on the direction of Graham Holdings i.e., Graham Holdings and Grand Canyon go up and down completely randomly.

Pair Corralation between Graham Holdings and Grand Canyon

Assuming the 90 days trading horizon Graham Holdings Co is expected to under-perform the Grand Canyon. But the stock apears to be less risky and, when comparing its historical volatility, Graham Holdings Co is 1.1 times less risky than Grand Canyon. The stock trades about -0.06 of its potential returns per unit of risk. The Grand Canyon Education is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  15,200  in Grand Canyon Education on April 24, 2025 and sell it today you would lose (900.00) from holding Grand Canyon Education or give up 5.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.44%
Values	Daily Returns

Graham Holdings Co  vs.  Grand Canyon Education

Graham Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graham Holdings Co has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

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. Despite nearly stable basic indicators, Grand Canyon is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Graham Holdings and Grand Canyon

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

The idea behind Graham Holdings Co and Grand Canyon Education 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.