Correlation Between Granite Construction and AEON MALL
Can any of the company-specific risk be diversified away by investing in both Granite Construction and AEON MALL 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 AEON MALL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and AEON MALL LTD, you can compare the effects of market volatilities on Granite Construction and AEON MALL 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 AEON MALL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and AEON MALL.
Diversification Opportunities for Granite Construction and AEON MALL
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Granite and AEON is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and AEON MALL LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AEON MALL LTD 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 AEON MALL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AEON MALL LTD has no effect on the direction of Granite Construction i.e., Granite Construction and AEON MALL go up and down completely randomly.
Pair Corralation between Granite Construction and AEON MALL
Assuming the 90 days trading horizon Granite Construction is expected to generate 1.48 times less return on investment than AEON MALL. But when comparing it to its historical volatility, Granite Construction is 1.13 times less risky than AEON MALL. It trades about 0.05 of its potential returns per unit of risk. AEON MALL LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,210 in AEON MALL LTD on September 13, 2024 and sell it today you would earn a total of 20.00 from holding AEON MALL LTD or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. AEON MALL LTD
Performance |
| Timeline |
| Granite Construction |
| AEON MALL LTD |
Granite Construction and AEON MALL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and AEON MALL
The main advantage of trading using opposite Granite Construction and AEON MALL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, AEON MALL 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 AEON MALL will offset losses from the drop in AEON MALL's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
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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 CEOs Directory module to screen CEOs from public companies around the world.
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