Correlation Between Granite Construction and Fair Isaac
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Fair Isaac 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 Fair Isaac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Fair Isaac Corp, you can compare the effects of market volatilities on Granite Construction and Fair Isaac 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 Fair Isaac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Fair Isaac.
Diversification Opportunities for Granite Construction and Fair Isaac
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Granite and Fair is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and Fair Isaac Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fair Isaac Corp 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 Fair Isaac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fair Isaac Corp has no effect on the direction of Granite Construction i.e., Granite Construction and Fair Isaac go up and down completely randomly.
Pair Corralation between Granite Construction and Fair Isaac
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.93 times more return on investment than Fair Isaac. However, Granite Construction is 1.08 times less risky than Fair Isaac. It trades about 0.11 of its potential returns per unit of risk. Fair Isaac Corp is currently generating about 0.01 per unit of risk. If you would invest 7,439 in Granite Construction on October 14, 2024 and sell it today you would earn a total of 1,011 from holding Granite Construction or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. Fair Isaac Corp
Performance |
| Timeline |
| Granite Construction |
| Fair Isaac Corp |
Granite Construction and Fair Isaac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Fair Isaac
The main advantage of trading using opposite Granite Construction and Fair Isaac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Fair Isaac 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 Fair Isaac will offset losses from the drop in Fair Isaac's long position.| Granite Construction vs. Lendlease Group | Granite Construction vs. Mobilezone Holding AG | Granite Construction vs. Geely Automobile Holdings | Granite Construction vs. OPKO HEALTH |
| Fair Isaac vs. Gaztransport Technigaz SA | Fair Isaac vs. Granite Construction | Fair Isaac vs. AGRICULTBK HADR25 YC | Fair Isaac vs. SOEDER SPORTFISKE AB |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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