Correlation Between Granite Construction and BIALETTI INDUSTRIE
Can any of the company-specific risk be diversified away by investing in both Granite Construction and BIALETTI INDUSTRIE 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 Construction and BIALETTI INDUSTRIE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and BIALETTI INDUSTRIE, you can compare the effects of market volatilities on Granite Construction and BIALETTI INDUSTRIE 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 Construction with a short position of BIALETTI INDUSTRIE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and BIALETTI INDUSTRIE.
Diversification Opportunities for Granite Construction and BIALETTI INDUSTRIE
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Granite and BIALETTI is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and BIALETTI INDUSTRIE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BIALETTI INDUSTRIE and Granite Construction 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 Construction are associated (or correlated) with BIALETTI INDUSTRIE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BIALETTI INDUSTRIE has no effect on the direction of Granite Construction i.e., Granite Construction and BIALETTI INDUSTRIE go up and down completely randomly.
Pair Corralation between Granite Construction and BIALETTI INDUSTRIE
Assuming the 90 days trading horizon Granite Construction is expected to under-perform the BIALETTI INDUSTRIE. But the stock apears to be less risky and, when comparing its historical volatility, Granite Construction is 4.68 times less risky than BIALETTI INDUSTRIE. The stock trades about -0.13 of its potential returns per unit of risk. The BIALETTI INDUSTRIE is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 15.00 in BIALETTI INDUSTRIE on October 30, 2024 and sell it today you would earn a total of 8.00 from holding BIALETTI INDUSTRIE or generate 53.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. BIALETTI INDUSTRIE
Performance |
| Timeline |
| Granite Construction |
| BIALETTI INDUSTRIE |
Granite Construction and BIALETTI INDUSTRIE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and BIALETTI INDUSTRIE
The main advantage of trading using opposite Granite Construction and BIALETTI INDUSTRIE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, BIALETTI INDUSTRIE 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 BIALETTI INDUSTRIE will offset losses from the drop in BIALETTI INDUSTRIE's long position.| Granite Construction vs. Xenia Hotels Resorts | Granite Construction vs. Globex Mining Enterprises | Granite Construction vs. Mitsui Chemicals | Granite Construction vs. NH HOTEL GROUP |
| BIALETTI INDUSTRIE vs. Ebro Foods SA | BIALETTI INDUSTRIE vs. Canadian Utilities Limited | BIALETTI INDUSTRIE vs. United Utilities Group | BIALETTI INDUSTRIE vs. Maple Leaf Foods |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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