Correlation Between Granite Construction and HYDROFARM HLD
Can any of the company-specific risk be diversified away by investing in both Granite Construction and HYDROFARM HLD 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 HYDROFARM HLD into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and HYDROFARM HLD GRP, you can compare the effects of market volatilities on Granite Construction and HYDROFARM HLD 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 HYDROFARM HLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and HYDROFARM HLD.
Diversification Opportunities for Granite Construction and HYDROFARM HLD
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Granite and HYDROFARM is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and HYDROFARM HLD GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYDROFARM HLD GRP 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 HYDROFARM HLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYDROFARM HLD GRP has no effect on the direction of Granite Construction i.e., Granite Construction and HYDROFARM HLD go up and down completely randomly.
Pair Corralation between Granite Construction and HYDROFARM HLD
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.45 times more return on investment than HYDROFARM HLD. However, Granite Construction is 2.22 times less risky than HYDROFARM HLD. It trades about 0.16 of its potential returns per unit of risk. HYDROFARM HLD GRP is currently generating about 0.0 per unit of risk. If you would invest 4,457 in Granite Construction on September 12, 2024 and sell it today you would earn a total of 4,643 from holding Granite Construction or generate 104.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. HYDROFARM HLD GRP
Performance |
| Timeline |
| Granite Construction |
| HYDROFARM HLD GRP |
Granite Construction and HYDROFARM HLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and HYDROFARM HLD
The main advantage of trading using opposite Granite Construction and HYDROFARM HLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, HYDROFARM HLD 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 HYDROFARM HLD will offset losses from the drop in HYDROFARM HLD's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| HYDROFARM HLD vs. AB Volvo | HYDROFARM HLD vs. Daimler Truck Holding | HYDROFARM HLD vs. Superior Plus Corp | HYDROFARM HLD vs. SIVERS SEMICONDUCTORS AB |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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