Correlation Between Grand Canyon and China Liberal

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

Diversification Opportunities for Grand Canyon and China Liberal

0.5

Correlation Coefficient

Grand Canyon  China Liberal

Very weak diversification

The 3 months correlation between Grand and China is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Grand Canyon Education and China Liberal Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Liberal Education 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 China Liberal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Liberal Education has no effect on the direction of Grand Canyon i.e., Grand Canyon and China Liberal go up and down completely randomly.

Pair Corralation between Grand Canyon and China Liberal

Given the investment horizon of 90 days Grand Canyon Education is expected to generate 0.04 times more return on investment than China Liberal. However, Grand Canyon Education is 22.54 times less risky than China Liberal. It trades about -0.16 of its potential returns per unit of risk. China Liberal Education is currently generating about -0.03 per unit of risk. If you would invest  19,401  in Grand Canyon Education on May 7, 2025 and sell it today you would lose (2,355) from holding Grand Canyon Education or give up 12.14% of portfolio value over 90 days.

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

Grand Canyon Education  vs.  China Liberal Education

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 weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

China Liberal Education

Risk-Adjusted Performance

Very Weak

Over the last 90 days China Liberal Education has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Grand Canyon and China Liberal

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

The idea behind Grand Canyon Education and China Liberal 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.