Correlation Between Granite Construction and AUST AGRICULTURAL
Can any of the company-specific risk be diversified away by investing in both Granite Construction and AUST AGRICULTURAL 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 AUST AGRICULTURAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and AUST AGRICULTURAL, you can compare the effects of market volatilities on Granite Construction and AUST AGRICULTURAL 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 AUST AGRICULTURAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and AUST AGRICULTURAL.
Diversification Opportunities for Granite Construction and AUST AGRICULTURAL
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Granite and AUST is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and AUST AGRICULTURAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AUST AGRICULTURAL 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 AUST AGRICULTURAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AUST AGRICULTURAL has no effect on the direction of Granite Construction i.e., Granite Construction and AUST AGRICULTURAL go up and down completely randomly.
Pair Corralation between Granite Construction and AUST AGRICULTURAL
Assuming the 90 days trading horizon Granite Construction is expected to generate 2.44 times more return on investment than AUST AGRICULTURAL. However, Granite Construction is 2.44 times more volatile than AUST AGRICULTURAL. It trades about 0.36 of its potential returns per unit of risk. AUST AGRICULTURAL is currently generating about -0.04 per unit of risk. If you would invest 7,500 in Granite Construction on August 30, 2024 and sell it today you would earn a total of 1,800 from holding Granite Construction or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. AUST AGRICULTURAL
Performance |
| Timeline |
| Granite Construction |
| AUST AGRICULTURAL |
Granite Construction and AUST AGRICULTURAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and AUST AGRICULTURAL
The main advantage of trading using opposite Granite Construction and AUST AGRICULTURAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, AUST AGRICULTURAL 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 AUST AGRICULTURAL will offset losses from the drop in AUST AGRICULTURAL's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| AUST AGRICULTURAL vs. RYU Apparel | AUST AGRICULTURAL vs. PLAYTIKA HOLDING DL 01 | AUST AGRICULTURAL vs. Columbia Sportswear | AUST AGRICULTURAL vs. Lifeway Foods |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |