Correlation Between Granite Construction and AGRICULTBK HADR25
Can any of the company-specific risk be diversified away by investing in both Granite Construction and AGRICULTBK HADR25 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 AGRICULTBK HADR25 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and AGRICULTBK HADR25 YC, you can compare the effects of market volatilities on Granite Construction and AGRICULTBK HADR25 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 AGRICULTBK HADR25. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and AGRICULTBK HADR25.
Diversification Opportunities for Granite Construction and AGRICULTBK HADR25
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Granite and AGRICULTBK is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and AGRICULTBK HADR25 YC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGRICULTBK HADR25 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 AGRICULTBK HADR25. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGRICULTBK HADR25 has no effect on the direction of Granite Construction i.e., Granite Construction and AGRICULTBK HADR25 go up and down completely randomly.
Pair Corralation between Granite Construction and AGRICULTBK HADR25
Assuming the 90 days trading horizon Granite Construction is expected to under-perform the AGRICULTBK HADR25. But the stock apears to be less risky and, when comparing its historical volatility, Granite Construction is 1.11 times less risky than AGRICULTBK HADR25. The stock trades about -0.11 of its potential returns per unit of risk. The AGRICULTBK HADR25 YC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,150 in AGRICULTBK HADR25 YC on September 19, 2024 and sell it today you would earn a total of 70.00 from holding AGRICULTBK HADR25 YC or generate 6.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. AGRICULTBK HADR25 YC
Performance |
| Timeline |
| Granite Construction |
| AGRICULTBK HADR25 |
Granite Construction and AGRICULTBK HADR25 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and AGRICULTBK HADR25
The main advantage of trading using opposite Granite Construction and AGRICULTBK HADR25 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, AGRICULTBK HADR25 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 AGRICULTBK HADR25 will offset losses from the drop in AGRICULTBK HADR25's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| AGRICULTBK HADR25 vs. The Toronto Dominion Bank | AGRICULTBK HADR25 vs. Superior Plus Corp | AGRICULTBK HADR25 vs. SIVERS SEMICONDUCTORS AB | AGRICULTBK HADR25 vs. NorAm Drilling AS |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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