Correlation Between Granite Construction and Fast Retailing
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Fast Retailing 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 Fast Retailing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Fast Retailing Co, you can compare the effects of market volatilities on Granite Construction and Fast Retailing 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 Fast Retailing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Fast Retailing.
Diversification Opportunities for Granite Construction and Fast Retailing
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Granite and Fast is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and Fast Retailing Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fast Retailing 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 Fast Retailing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fast Retailing has no effect on the direction of Granite Construction i.e., Granite Construction and Fast Retailing go up and down completely randomly.
Pair Corralation between Granite Construction and Fast Retailing
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.95 times more return on investment than Fast Retailing. However, Granite Construction is 1.05 times less risky than Fast Retailing. It trades about -0.05 of its potential returns per unit of risk. Fast Retailing Co is currently generating about -0.2 per unit of risk. If you would invest 8,500 in Granite Construction on November 1, 2024 and sell it today you would lose (200.00) from holding Granite Construction or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. Fast Retailing Co
Performance |
| Timeline |
| Granite Construction |
| Fast Retailing |
Granite Construction and Fast Retailing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Fast Retailing
The main advantage of trading using opposite Granite Construction and Fast Retailing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Fast Retailing 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 Fast Retailing will offset losses from the drop in Fast Retailing's long position.| Granite Construction vs. Calibre Mining Corp | Granite Construction vs. Perseus Mining Limited | Granite Construction vs. GLG LIFE TECH | Granite Construction vs. Allegheny Technologies Incorporated |
| Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc | Fast Retailing vs. Apple Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |