Correlation Between Granite Construction and VIRGIN WINES
Can any of the company-specific risk be diversified away by investing in both Granite Construction and VIRGIN WINES 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 VIRGIN WINES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and VIRGIN WINES UK, you can compare the effects of market volatilities on Granite Construction and VIRGIN WINES 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 VIRGIN WINES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and VIRGIN WINES.
Diversification Opportunities for Granite Construction and VIRGIN WINES
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and VIRGIN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and VIRGIN WINES UK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIRGIN WINES UK 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 VIRGIN WINES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIRGIN WINES UK has no effect on the direction of Granite Construction i.e., Granite Construction and VIRGIN WINES go up and down completely randomly.
Pair Corralation between Granite Construction and VIRGIN WINES
If you would invest 7,950 in Granite Construction on September 2, 2024 and sell it today you would earn a total of 1,300 from holding Granite Construction or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Granite Construction vs. VIRGIN WINES UK
Performance |
| Timeline |
| Granite Construction |
| VIRGIN WINES UK |
Granite Construction and VIRGIN WINES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and VIRGIN WINES
The main advantage of trading using opposite Granite Construction and VIRGIN WINES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, VIRGIN WINES 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 VIRGIN WINES will offset losses from the drop in VIRGIN WINES's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| VIRGIN WINES vs. LANSON BCC INH EO | VIRGIN WINES vs. Superior Plus Corp | VIRGIN WINES vs. NMI Holdings | VIRGIN WINES vs. Origin Agritech |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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