Correlation Between Granite Construction and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both Granite Construction and WIMFARM SA 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 WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and WIMFARM SA EO, you can compare the effects of market volatilities on Granite Construction and WIMFARM SA 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 WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and WIMFARM SA.
Diversification Opportunities for Granite Construction and WIMFARM SA
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and WIMFARM is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO 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 WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of Granite Construction i.e., Granite Construction and WIMFARM SA go up and down completely randomly.
Pair Corralation between Granite Construction and WIMFARM SA
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.46 times more return on investment than WIMFARM SA. However, Granite Construction is 2.18 times less risky than WIMFARM SA. It trades about 0.15 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.03 per unit of risk. If you would invest 4,344 in Granite Construction on November 3, 2024 and sell it today you would earn a total of 4,106 from holding Granite Construction or generate 94.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. WIMFARM SA EO
Performance |
| Timeline |
| Granite Construction |
| WIMFARM SA EO |
Granite Construction and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and WIMFARM SA
The main advantage of trading using opposite Granite Construction and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| Granite Construction vs. Easy Software AG | Granite Construction vs. Magic Software Enterprises | Granite Construction vs. Take Two Interactive Software | Granite Construction vs. Mobilezone Holding AG |
| WIMFARM SA vs. CDL INVESTMENT | WIMFARM SA vs. Commercial Vehicle Group | WIMFARM SA vs. SEI INVESTMENTS | WIMFARM SA vs. CarsalesCom |
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.
Other Complementary Tools
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |