Correlation Between Granite Construction and American Clean
Can any of the company-specific risk be diversified away by investing in both Granite Construction and American Clean 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 American Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Granite Construction Incorporated and American Clean Resources, you can compare the effects of market volatilities on Granite Construction and American Clean 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 American Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and American Clean.
Diversification Opportunities for Granite Construction and American Clean
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and American is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and American Clean Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Clean Resources 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 Incorporated are associated (or correlated) with American Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Clean Resources has no effect on the direction of Granite Construction i.e., Granite Construction and American Clean go up and down completely randomly.
Pair Corralation between Granite Construction and American Clean
If you would invest 8,206 in Granite Construction Incorporated on August 31, 2024 and sell it today you would earn a total of 1,731 from holding Granite Construction Incorporated or generate 21.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Granite Construction Incorpora vs. American Clean Resources
Performance |
| Timeline |
| Granite Construction |
| American Clean Resources |
Granite Construction and American Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and American Clean
The main advantage of trading using opposite Granite Construction and American Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, American Clean 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 American Clean will offset losses from the drop in American Clean's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| American Clean vs. Scottie Resources Corp | American Clean vs. Defiance Silver Corp | American Clean vs. HUMANA INC | American Clean vs. SCOR PK |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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