Correlation Between Granite Construction and Deutsche Pfandbriefbank
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Deutsche Pfandbriefbank AG, you can compare the effects of market volatilities on Granite Construction and Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Deutsche Pfandbriefbank.
Diversification Opportunities for Granite Construction and Deutsche Pfandbriefbank
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Deutsche is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of Granite Construction i.e., Granite Construction and Deutsche Pfandbriefbank go up and down completely randomly.
Pair Corralation between Granite Construction and Deutsche Pfandbriefbank
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.81 times more return on investment than Deutsche Pfandbriefbank. However, Granite Construction is 1.24 times less risky than Deutsche Pfandbriefbank. It trades about 0.15 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about 0.05 per unit of risk. If you would invest 6,528 in Granite Construction on November 2, 2024 and sell it today you would earn a total of 2,022 from holding Granite Construction or generate 30.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.04% |
| Values | Daily Returns |
Granite Construction vs. Deutsche Pfandbriefbank AG
Performance |
| Timeline |
| Granite Construction |
| Deutsche Pfandbriefbank |
Granite Construction and Deutsche Pfandbriefbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Deutsche Pfandbriefbank
The main advantage of trading using opposite Granite Construction and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.| Granite Construction vs. Genertec Universal Medical | Granite Construction vs. CompuGroup Medical SE | Granite Construction vs. Globex Mining Enterprises | Granite Construction vs. Avanos Medical |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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