Correlation Between Granite Construction and Thermo Fisher
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Thermo Fisher 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 Thermo Fisher into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction and Thermo Fisher Scientific, you can compare the effects of market volatilities on Granite Construction and Thermo Fisher 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 Thermo Fisher. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Thermo Fisher.
Diversification Opportunities for Granite Construction and Thermo Fisher
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and Thermo is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction and Thermo Fisher Scientific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thermo Fisher Scientific 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 Thermo Fisher. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thermo Fisher Scientific has no effect on the direction of Granite Construction i.e., Granite Construction and Thermo Fisher go up and down completely randomly.
Pair Corralation between Granite Construction and Thermo Fisher
Assuming the 90 days trading horizon Granite Construction is expected to generate 0.73 times more return on investment than Thermo Fisher. However, Granite Construction is 1.36 times less risky than Thermo Fisher. It trades about 0.01 of its potential returns per unit of risk. Thermo Fisher Scientific is currently generating about -0.05 per unit of risk. If you would invest 9,150 in Granite Construction on September 14, 2024 and sell it today you would earn a total of 0.00 from holding Granite Construction or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction vs. Thermo Fisher Scientific
Performance |
| Timeline |
| Granite Construction |
| Thermo Fisher Scientific |
Granite Construction and Thermo Fisher Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Thermo Fisher
The main advantage of trading using opposite Granite Construction and Thermo Fisher positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Thermo Fisher 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 Thermo Fisher will offset losses from the drop in Thermo Fisher's long position.| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
| Thermo Fisher vs. Penta Ocean Construction Co | Thermo Fisher vs. Coeur Mining | Thermo Fisher vs. Sterling Construction | Thermo Fisher vs. Granite Construction |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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