Correlation Between ENGlobal and Great Lakes
Can any of the company-specific risk be diversified away by investing in both ENGlobal and Great Lakes 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 ENGlobal and Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ENGlobal and Great Lakes Dredge, you can compare the effects of market volatilities on ENGlobal and Great Lakes 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 ENGlobal with a short position of Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of ENGlobal and Great Lakes.
Diversification Opportunities for ENGlobal and Great Lakes
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ENGlobal and Great is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding ENGlobal and Great Lakes Dredge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Dredge and ENGlobal 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 ENGlobal are associated (or correlated) with Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Dredge has no effect on the direction of ENGlobal i.e., ENGlobal and Great Lakes go up and down completely randomly.
Pair Corralation between ENGlobal and Great Lakes
Considering the 90-day investment horizon ENGlobal is expected to generate 2.05 times less return on investment than Great Lakes. In addition to that, ENGlobal is 2.24 times more volatile than Great Lakes Dredge. It trades about 0.04 of its total potential returns per unit of risk. Great Lakes Dredge is currently generating about 0.2 per unit of volatility. If you would invest 1,147 in Great Lakes Dredge on August 31, 2024 and sell it today you would earn a total of 105.00 from holding Great Lakes Dredge or generate 9.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ENGlobal vs. Great Lakes Dredge
Performance |
| Timeline |
| ENGlobal |
| Great Lakes Dredge |
ENGlobal and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ENGlobal and Great Lakes
The main advantage of trading using opposite ENGlobal and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ENGlobal position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.| ENGlobal vs. Fuel Tech | ENGlobal vs. Polar Power | ENGlobal vs. Ocean Power Technologies | ENGlobal vs. Pioneer Power Solutions |
| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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