Correlation Between Granite City and Japan System
Can any of the company-specific risk be diversified away by investing in both Granite City and Japan System 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 Granite City and Japan System into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite City Food and Japan System Techniques, you can compare the effects of market volatilities on Granite City and Japan System 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 Granite City with a short position of Japan System. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite City and Japan System.
Diversification Opportunities for Granite City and Japan System
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Granite and Japan is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Granite City Food and Japan System Techniques in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan System Techniques and Granite City 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 Granite City Food are associated (or correlated) with Japan System. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan System Techniques has no effect on the direction of Granite City i.e., Granite City and Japan System go up and down completely randomly.
Pair Corralation between Granite City and Japan System
If you would invest 619.00 in Japan System Techniques on September 1, 2024 and sell it today you would earn a total of 463.00 from holding Japan System Techniques or generate 74.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 8.06% |
| Values | Daily Returns |
Granite City Food vs. Japan System Techniques
Performance |
| Timeline |
| Granite City Food |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Japan System Techniques |
Granite City and Japan System Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite City and Japan System
The main advantage of trading using opposite Granite City and Japan System positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite City position performs unexpectedly, Japan System 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 Japan System will offset losses from the drop in Japan System's long position.| Granite City vs. Ark Restaurants Corp | Granite City vs. Noble Romans | Granite City vs. Nathans Famous | Granite City vs. Biglari Holdings |
| Japan System vs. Saia Inc | Japan System vs. Bright Scholar Education | Japan System vs. Lifevantage | Japan System vs. TFI International |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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