Correlation Between Granite Construction and LABOCANNA
Can any of the company-specific risk be diversified away by investing in both Granite Construction and LABOCANNA 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 LABOCANNA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and LABOCANNA SA ZY 10, you can compare the effects of market volatilities on Granite Construction and LABOCANNA 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 LABOCANNA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and LABOCANNA.
Diversification Opportunities for Granite Construction and LABOCANNA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Granite and LABOCANNA is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and LABOCANNA SA ZY 10 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LABOCANNA SA ZY 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 LABOCANNA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LABOCANNA SA ZY has no effect on the direction of Granite Construction i.e., Granite Construction and LABOCANNA go up and down completely randomly.
Pair Corralation between Granite Construction and LABOCANNA
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.39 times more return on investment than LABOCANNA. However, Granite Construction is 2.56 times less risky than LABOCANNA. It trades about 0.14 of its potential returns per unit of risk. LABOCANNA SA ZY 10 is currently generating about 0.01 per unit of risk. If you would invest 3,651 in Granite Construction on September 12, 2024 and sell it today you would earn a total of 5,449 from holding Granite Construction or generate 149.25% 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. LABOCANNA SA ZY 10
Performance |
| Timeline |
| Granite Construction |
| LABOCANNA SA ZY |
Granite Construction and LABOCANNA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and LABOCANNA
The main advantage of trading using opposite Granite Construction and LABOCANNA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, LABOCANNA 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 LABOCANNA will offset losses from the drop in LABOCANNA's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| LABOCANNA vs. WisdomTree Investments | LABOCANNA vs. Granite Construction | LABOCANNA vs. CDL INVESTMENT | LABOCANNA vs. Sterling Construction |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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