Correlation Between Granite Creek and Bourque Indts

Can any of the company-specific risk be diversified away by investing in both Granite Creek and Bourque Indts 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 Granite Creek and Bourque Indts into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite Creek Copper and Bourque Indts, you can compare the effects of market volatilities on Granite Creek and Bourque Indts 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 Granite Creek with a short position of Bourque Indts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Creek and Bourque Indts.

Diversification Opportunities for Granite Creek and Bourque Indts

-0.17

Correlation Coefficient

Granite Creek  Bourque Indts

Good diversification

The 3 months correlation between Granite and Bourque is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Granite Creek Copper and Bourque Indts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bourque Indts and Granite Creek 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 Granite Creek Copper are associated (or correlated) with Bourque Indts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bourque Indts has no effect on the direction of Granite Creek i.e., Granite Creek and Bourque Indts go up and down completely randomly.

Pair Corralation between Granite Creek and Bourque Indts

Assuming the 90 days horizon Granite Creek is expected to generate 1.02 times less return on investment than Bourque Indts. But when comparing it to its historical volatility, Granite Creek Copper is 1.27 times less risky than Bourque Indts. It trades about 0.02 of its potential returns per unit of risk. Bourque Indts is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.27  in Bourque Indts on September 4, 2024 and sell it today you would lose (0.26) from holding Bourque Indts or give up 96.3% of portfolio value over 90 days.

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

Granite Creek Copper  vs.  Bourque Indts

Granite Creek Copper

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Granite Creek Copper has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Granite Creek is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Bourque Indts

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Bourque Indts are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite fragile basic indicators, Bourque Indts disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Granite Creek and Bourque Indts

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

The idea behind Granite Creek Copper and Bourque Indts 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.