Correlation Between Granite Construction and H FARM
Can any of the company-specific risk be diversified away by investing in both Granite Construction and H FARM 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 Construction and H FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and H FARM SPA, you can compare the effects of market volatilities on Granite Construction and H FARM 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 Construction with a short position of H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and H FARM.
Diversification Opportunities for Granite Construction and H FARM
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and 5JQ is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA and Granite Construction 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 Construction are associated (or correlated) with H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of Granite Construction i.e., Granite Construction and H FARM go up and down completely randomly.
Pair Corralation between Granite Construction and H FARM
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.5 times more return on investment than H FARM. However, Granite Construction is 1.99 times less risky than H FARM. It trades about 0.17 of its potential returns per unit of risk. H FARM SPA is currently generating about -0.02 per unit of risk. If you would invest 5,776 in Granite Construction on September 24, 2024 and sell it today you would earn a total of 2,874 from holding Granite Construction or generate 49.76% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Granite Construction vs. H FARM SPA
Performance |
Timeline |
Granite Construction |
H FARM SPA |
Granite Construction and H FARM Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Granite Construction and H FARM
The main advantage of trading using opposite Granite Construction and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.Granite Construction vs. Zoom Video Communications | Granite Construction vs. UNIVERSAL MUSIC GROUP | Granite Construction vs. NORTHEAST UTILITIES | Granite Construction vs. Tencent Music Entertainment |
H FARM vs. Blackstone Group | H FARM vs. The Bank of | H FARM vs. Ameriprise Financial | H FARM vs. State Street |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
Transaction History View history of all your transactions and understand their impact on performance | |
Stocks Directory Find actively traded stocks across global markets | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |