Correlation Between QuantaSing Group and Grand Canyon

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

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

Diversification Opportunities for QuantaSing Group and Grand Canyon

0.08

Correlation Coefficient

QuantaSing Group  Grand Canyon

Significant diversification

The 3 months correlation between QuantaSing and Grand is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding QuantaSing Group Limited 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 QuantaSing Group 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 QuantaSing Group Limited 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 QuantaSing Group i.e., QuantaSing Group and Grand Canyon go up and down completely randomly.

Pair Corralation between QuantaSing Group and Grand Canyon

Considering the 90-day investment horizon QuantaSing Group Limited is expected to under-perform the Grand Canyon. In addition to that, QuantaSing Group is 1.87 times more volatile than Grand Canyon Education. It trades about -0.08 of its total potential returns per unit of risk. Grand Canyon Education is currently generating about 0.25 per unit of volatility. If you would invest  13,735  in Grand Canyon Education on August 31, 2024 and sell it today you would earn a total of  2,744  from holding Grand Canyon Education or generate 19.98% return on investment over 90 days.

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

QuantaSing Group Limited  vs.  Grand Canyon Education

QuantaSing Group

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in QuantaSing Group Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating basic indicators, QuantaSing Group reported solid returns over the last few months and may actually be approaching a breakup point.

Grand Canyon Education

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Grand Canyon Education are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, Grand Canyon exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with QuantaSing Group and Grand Canyon

The main advantage of trading using opposite QuantaSing Group and Grand Canyon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if QuantaSing Group 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 QuantaSing Group Limited 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.