Correlation Between CeoTronics and Granite Construction
Can any of the company-specific risk be diversified away by investing in both CeoTronics 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 CeoTronics and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CeoTronics AG and Granite Construction, you can compare the effects of market volatilities on CeoTronics 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 CeoTronics with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of CeoTronics and Granite Construction.
Diversification Opportunities for CeoTronics and Granite Construction
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CeoTronics and Granite is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding CeoTronics AG and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and CeoTronics 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 CeoTronics AG 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 CeoTronics i.e., CeoTronics and Granite Construction go up and down completely randomly.
Pair Corralation between CeoTronics and Granite Construction
Assuming the 90 days trading horizon CeoTronics AG is expected to generate 1.65 times more return on investment than Granite Construction. However, CeoTronics is 1.65 times more volatile than Granite Construction. It trades about -0.16 of its potential returns per unit of risk. Granite Construction is currently generating about -0.29 per unit of risk. If you would invest 640.00 in CeoTronics AG on October 14, 2024 and sell it today you would lose (30.00) from holding CeoTronics AG or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CeoTronics AG vs. Granite Construction
Performance |
| Timeline |
| CeoTronics AG |
| Granite Construction |
CeoTronics and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CeoTronics and Granite Construction
The main advantage of trading using opposite CeoTronics and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CeoTronics 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.| CeoTronics vs. GREENX METALS LTD | CeoTronics vs. NetSol Technologies | CeoTronics vs. ORMAT TECHNOLOGIES | CeoTronics vs. MCEWEN MINING INC |
| Granite Construction vs. Lendlease Group | Granite Construction vs. Mobilezone Holding AG | Granite Construction vs. Geely Automobile Holdings | Granite Construction vs. OPKO HEALTH |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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