Correlation Between Granite Construction and Klöckner
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Klöckner 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 Klöckner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Klckner Co SE, you can compare the effects of market volatilities on Granite Construction and Klöckner 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 Klöckner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Klöckner.
Diversification Opportunities for Granite Construction and Klöckner
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Granite and Klöckner is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and Klckner Co SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Klckner Co SE 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 Klöckner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Klckner Co SE has no effect on the direction of Granite Construction i.e., Granite Construction and Klöckner go up and down completely randomly.
Pair Corralation between Granite Construction and Klöckner
Assuming the 90 days trading horizon Granite Construction is expected to generate 1.0 times more return on investment than Klöckner. However, Granite Construction is 1.0 times more volatile than Klckner Co SE. It trades about 0.17 of its potential returns per unit of risk. Klckner Co SE is currently generating about -0.05 per unit of risk. If you would invest 4,457 in Granite Construction on September 3, 2024 and sell it today you would earn a total of 4,943 from holding Granite Construction or generate 110.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. Klckner Co SE
Performance |
| Timeline |
| Granite Construction |
| Klckner Co SE |
Granite Construction and Klöckner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Klöckner
The main advantage of trading using opposite Granite Construction and Klöckner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Klöckner 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 Klöckner will offset losses from the drop in Klöckner's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| Klöckner vs. MCEWEN MINING INC | Klöckner vs. GRUPO CARSO A1 | Klöckner vs. HYATT HOTELS A | Klöckner vs. Choice Hotels International |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences |