Correlation Between Orsted AS and Granite Construction
Can any of the company-specific risk be diversified away by investing in both Orsted AS 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 Orsted AS and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orsted AS and Granite Construction, you can compare the effects of market volatilities on Orsted AS 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 Orsted AS with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orsted AS and Granite Construction.
Diversification Opportunities for Orsted AS and Granite Construction
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orsted and Granite is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Orsted AS and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and Orsted AS 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 Orsted AS 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 Orsted AS i.e., Orsted AS and Granite Construction go up and down completely randomly.
Pair Corralation between Orsted AS and Granite Construction
Assuming the 90 days horizon Orsted AS is expected to under-perform the Granite Construction. In addition to that, Orsted AS is 1.51 times more volatile than Granite Construction. It trades about -0.02 of its total potential returns per unit of risk. Granite Construction is currently generating about 0.09 per unit of volatility. If you would invest 3,952 in Granite Construction on October 16, 2024 and sell it today you would earn a total of 4,598 from holding Granite Construction or generate 116.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Orsted AS vs. Granite Construction
Performance |
| Timeline |
| Orsted AS |
| Granite Construction |
Orsted AS and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orsted AS and Granite Construction
The main advantage of trading using opposite Orsted AS and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orsted AS 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.| Orsted AS vs. Hochschild Mining plc | Orsted AS vs. BRAGG GAMING GRP | Orsted AS vs. MOVIE GAMES SA | Orsted AS vs. Corporate Office Properties |
| Granite Construction vs. Cairo Communication SpA | Granite Construction vs. T MOBILE INCDL 00001 | Granite Construction vs. Ribbon Communications | Granite Construction vs. WillScot Mobile Mini |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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