Correlation Between Granite Construction and COREBRIDGE FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Granite Construction and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and COREBRIDGE FINANCIAL INC, you can compare the effects of market volatilities on Granite Construction and COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and COREBRIDGE FINANCIAL.
Diversification Opportunities for Granite Construction and COREBRIDGE FINANCIAL
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Granite and COREBRIDGE is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and COREBRIDGE FINANCIAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COREBRIDGE FINANCIAL INC 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 COREBRIDGE FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COREBRIDGE FINANCIAL INC has no effect on the direction of Granite Construction i.e., Granite Construction and COREBRIDGE FINANCIAL go up and down completely randomly.
Pair Corralation between Granite Construction and COREBRIDGE FINANCIAL
Assuming the 90 days trading horizon Granite Construction is expected to under-perform the COREBRIDGE FINANCIAL. In addition to that, Granite Construction is 1.22 times more volatile than COREBRIDGE FINANCIAL INC. It trades about -0.07 of its total potential returns per unit of risk. COREBRIDGE FINANCIAL INC is currently generating about 0.3 per unit of volatility. If you would invest 2,980 in COREBRIDGE FINANCIAL INC on November 7, 2024 and sell it today you would earn a total of 300.00 from holding COREBRIDGE FINANCIAL INC or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Granite Construction vs. COREBRIDGE FINANCIAL INC
Performance |
| Timeline |
| Granite Construction |
| COREBRIDGE FINANCIAL INC |
Granite Construction and COREBRIDGE FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and COREBRIDGE FINANCIAL
The main advantage of trading using opposite Granite Construction and COREBRIDGE FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, COREBRIDGE FINANCIAL 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 COREBRIDGE FINANCIAL will offset losses from the drop in COREBRIDGE FINANCIAL's long position.The idea behind Granite Construction and COREBRIDGE FINANCIAL INC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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