Correlation Between Great Lakes and Primoris Services
Can any of the company-specific risk be diversified away by investing in both Great Lakes and Primoris Services 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 Great Lakes and Primoris Services into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Lakes Dredge and Primoris Services, you can compare the effects of market volatilities on Great Lakes and Primoris Services 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 Great Lakes with a short position of Primoris Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Lakes and Primoris Services.
Diversification Opportunities for Great Lakes and Primoris Services
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Primoris is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Dredge and Primoris Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primoris Services and Great Lakes 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 Great Lakes Dredge are associated (or correlated) with Primoris Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primoris Services has no effect on the direction of Great Lakes i.e., Great Lakes and Primoris Services go up and down completely randomly.
Pair Corralation between Great Lakes and Primoris Services
Given the investment horizon of 90 days Great Lakes is expected to generate 1.67 times less return on investment than Primoris Services. In addition to that, Great Lakes is 1.23 times more volatile than Primoris Services. It trades about 0.05 of its total potential returns per unit of risk. Primoris Services is currently generating about 0.11 per unit of volatility. If you would invest 2,546 in Primoris Services on November 2, 2024 and sell it today you would earn a total of 5,092 from holding Primoris Services or generate 200.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Lakes Dredge vs. Primoris Services
Performance |
| Timeline |
| Great Lakes Dredge |
| Primoris Services |
Great Lakes and Primoris Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Lakes and Primoris Services
The main advantage of trading using opposite Great Lakes and Primoris Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Lakes position performs unexpectedly, Primoris Services 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 Primoris Services will offset losses from the drop in Primoris Services' long position.| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
| Primoris Services vs. MYR Group | Primoris Services vs. Granite Construction Incorporated | Primoris Services vs. Matrix Service Co | Primoris Services vs. Api Group Corp |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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