Correlation Between ANTA SPORTS and Granite Construction
Can any of the company-specific risk be diversified away by investing in both ANTA SPORTS and Granite Construction 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 ANTA SPORTS and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ANTA SPORTS PRODUCT and Granite Construction, you can compare the effects of market volatilities on ANTA SPORTS and Granite Construction 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 ANTA SPORTS with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANTA SPORTS and Granite Construction.
Diversification Opportunities for ANTA SPORTS and Granite Construction
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ANTA and Granite is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding ANTA SPORTS PRODUCT and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and ANTA SPORTS 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 ANTA SPORTS PRODUCT are associated (or correlated) with Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of ANTA SPORTS i.e., ANTA SPORTS and Granite Construction go up and down completely randomly.
Pair Corralation between ANTA SPORTS and Granite Construction
Assuming the 90 days trading horizon ANTA SPORTS is expected to generate 3.29 times less return on investment than Granite Construction. In addition to that, ANTA SPORTS is 1.73 times more volatile than Granite Construction. It trades about 0.04 of its total potential returns per unit of risk. Granite Construction is currently generating about 0.21 per unit of volatility. If you would invest 5,577 in Granite Construction on August 29, 2024 and sell it today you would earn a total of 3,873 from holding Granite Construction or generate 69.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ANTA SPORTS PRODUCT vs. Granite Construction
Performance |
| Timeline |
| ANTA SPORTS PRODUCT |
| Granite Construction |
ANTA SPORTS and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ANTA SPORTS and Granite Construction
The main advantage of trading using opposite ANTA SPORTS and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ANTA SPORTS position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Apple Inc | ANTA SPORTS vs. Microsoft | ANTA SPORTS vs. Microsoft |
| Granite Construction vs. Flutter Entertainment PLC | Granite Construction vs. Townsquare Media | Granite Construction vs. Hollywood Bowl Group | Granite Construction vs. Caseys General Stores |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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