Correlation Between Granite Construction and Hanison Construction
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Hanison Construction 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 Hanison Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Hanison Construction Holdings, you can compare the effects of market volatilities on Granite Construction and Hanison Construction 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 Hanison Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Hanison Construction.
Diversification Opportunities for Granite Construction and Hanison Construction
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and Hanison is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and Hanison Construction Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hanison Construction 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 Hanison Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hanison Construction has no effect on the direction of Granite Construction i.e., Granite Construction and Hanison Construction go up and down completely randomly.
Pair Corralation between Granite Construction and Hanison Construction
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.87 times more return on investment than Hanison Construction. However, Granite Construction is 1.15 times less risky than Hanison Construction. It trades about 0.08 of its potential returns per unit of risk. Hanison Construction Holdings is currently generating about 0.05 per unit of risk. If you would invest 3,894 in Granite Construction on November 28, 2024 and sell it today you would earn a total of 3,856 from holding Granite Construction or generate 99.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. Hanison Construction Holdings
Performance |
| Timeline |
| Granite Construction |
| Hanison Construction |
Granite Construction and Hanison Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Hanison Construction
The main advantage of trading using opposite Granite Construction and Hanison Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Hanison Construction 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 Hanison Construction will offset losses from the drop in Hanison Construction's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| Hanison Construction vs. ATOSS SOFTWARE | Hanison Construction vs. De Grey Mining | Hanison Construction vs. Western Copper and | Hanison Construction vs. Japan Tobacco |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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