Correlation Between Granite Construction and DICKER DATA
Can any of the company-specific risk be diversified away by investing in both Granite Construction and DICKER DATA 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 DICKER DATA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and DICKER DATA LTD, you can compare the effects of market volatilities on Granite Construction and DICKER DATA 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 DICKER DATA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and DICKER DATA.
Diversification Opportunities for Granite Construction and DICKER DATA
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and DICKER is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and DICKER DATA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKER DATA 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 DICKER DATA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKER DATA LTD has no effect on the direction of Granite Construction i.e., Granite Construction and DICKER DATA go up and down completely randomly.
Pair Corralation between Granite Construction and DICKER DATA
Assuming the 90 days trading horizon Granite Construction is expected to generate 1.14 times more return on investment than DICKER DATA. However, Granite Construction is 1.14 times more volatile than DICKER DATA LTD. It trades about 0.25 of its potential returns per unit of risk. DICKER DATA LTD is currently generating about 0.03 per unit of risk. If you would invest 8,150 in Granite Construction on September 5, 2024 and sell it today you would earn a total of 1,250 from holding Granite Construction or generate 15.34% 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. DICKER DATA LTD
Performance |
| Timeline |
| Granite Construction |
| DICKER DATA LTD |
Granite Construction and DICKER DATA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and DICKER DATA
The main advantage of trading using opposite Granite Construction and DICKER DATA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, DICKER DATA 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 DICKER DATA will offset losses from the drop in DICKER DATA's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| DICKER DATA vs. HYDROFARM HLD GRP | DICKER DATA vs. Sterling Construction | DICKER DATA vs. Granite Construction | DICKER DATA vs. NISSIN FOODS HLDGS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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