Correlation Between Granite Construction and CeoTronics
Can any of the company-specific risk be diversified away by investing in both Granite Construction and CeoTronics 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 CeoTronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and CeoTronics AG, you can compare the effects of market volatilities on Granite Construction and CeoTronics 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 CeoTronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and CeoTronics.
Diversification Opportunities for Granite Construction and CeoTronics
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Granite and CeoTronics is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and CeoTronics AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CeoTronics AG 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 CeoTronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CeoTronics AG has no effect on the direction of Granite Construction i.e., Granite Construction and CeoTronics go up and down completely randomly.
Pair Corralation between Granite Construction and CeoTronics
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.86 times more return on investment than CeoTronics. However, Granite Construction is 1.17 times less risky than CeoTronics. It trades about 0.11 of its potential returns per unit of risk. CeoTronics AG is currently generating about 0.04 per unit of risk. If you would invest 3,194 in Granite Construction on September 26, 2024 and sell it today you would earn a total of 5,406 from holding Granite Construction or generate 169.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. CeoTronics AG
Performance |
| Timeline |
| Granite Construction |
| CeoTronics AG |
Granite Construction and CeoTronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and CeoTronics
The main advantage of trading using opposite Granite Construction and CeoTronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, CeoTronics 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 CeoTronics will offset losses from the drop in CeoTronics' long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| CeoTronics vs. Cisco Systems | CeoTronics vs. Cisco Systems | CeoTronics vs. Motorola Solutions | CeoTronics vs. Nokia |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |