Correlation Between DISTRICT METALS and Granite Construction
Can any of the company-specific risk be diversified away by investing in both DISTRICT METALS 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 DISTRICT METALS and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DISTRICT METALS and Granite Construction, you can compare the effects of market volatilities on DISTRICT METALS 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 DISTRICT METALS with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of DISTRICT METALS and Granite Construction.
Diversification Opportunities for DISTRICT METALS and Granite Construction
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DISTRICT and Granite is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding DISTRICT METALS and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS i.e., DISTRICT METALS and Granite Construction go up and down completely randomly.
Pair Corralation between DISTRICT METALS and Granite Construction
Assuming the 90 days trading horizon DISTRICT METALS is expected to generate 3.26 times more return on investment than Granite Construction. However, DISTRICT METALS is 3.26 times more volatile than Granite Construction. It trades about 0.1 of its potential returns per unit of risk. Granite Construction is currently generating about -0.11 per unit of risk. If you would invest 23.00 in DISTRICT METALS on October 26, 2024 and sell it today you would earn a total of 3.00 from holding DISTRICT METALS or generate 13.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DISTRICT METALS vs. Granite Construction
Performance |
| Timeline |
| DISTRICT METALS |
| Granite Construction |
DISTRICT METALS and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DISTRICT METALS and Granite Construction
The main advantage of trading using opposite DISTRICT METALS and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DISTRICT METALS 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.| DISTRICT METALS vs. Rio Tinto Group | DISTRICT METALS vs. Anglo American plc | DISTRICT METALS vs. Mineral Resources Limited | DISTRICT METALS vs. NEXA RESOURCES SA |
| Granite Construction vs. Virtus Investment Partners | Granite Construction vs. CHRYSALIS INVESTMENTS LTD | Granite Construction vs. CDL INVESTMENT | Granite Construction vs. IMAGIN MEDICAL INC |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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