Correlation Between Granite Real and Vita Coco
Can any of the company-specific risk be diversified away by investing in both Granite Real and Vita Coco 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 Real and Vita Coco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Real Estate and Vita Coco, you can compare the effects of market volatilities on Granite Real and Vita Coco 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 Real with a short position of Vita Coco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Real and Vita Coco.
Diversification Opportunities for Granite Real and Vita Coco
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Granite and Vita is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Granite Real Estate and Vita Coco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vita Coco and Granite Real 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 Real Estate are associated (or correlated) with Vita Coco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vita Coco has no effect on the direction of Granite Real i.e., Granite Real and Vita Coco go up and down completely randomly.
Pair Corralation between Granite Real and Vita Coco
Assuming the 90 days horizon Granite Real is expected to generate 71.0 times less return on investment than Vita Coco. But when comparing it to its historical volatility, Granite Real Estate is 1.31 times less risky than Vita Coco. It trades about 0.0 of its potential returns per unit of risk. Vita Coco is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,596 in Vita Coco on September 12, 2024 and sell it today you would earn a total of 1,039 from holding Vita Coco or generate 40.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 96.31% |
| Values | Daily Returns |
Granite Real Estate vs. Vita Coco
Performance |
| Timeline |
| Granite Real Estate |
| Vita Coco |
Granite Real and Vita Coco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Real and Vita Coco
The main advantage of trading using opposite Granite Real and Vita Coco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Real position performs unexpectedly, Vita Coco 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 Vita Coco will offset losses from the drop in Vita Coco's long position.| Granite Real vs. SBM Offshore NV | Granite Real vs. Anterix | Granite Real vs. Sweetgreen | Granite Real vs. NETGEAR |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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