Correlation Between Granite Construction and Auxico Resources
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Auxico Resources 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 Auxico Resources 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 Auxico Resources Canada, you can compare the effects of market volatilities on Granite Construction and Auxico Resources 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 Auxico Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Auxico Resources.
Diversification Opportunities for Granite Construction and Auxico Resources
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Auxico is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Auxico Resources Canada in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auxico Resources Canada 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 Auxico Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auxico Resources Canada has no effect on the direction of Granite Construction i.e., Granite Construction and Auxico Resources go up and down completely randomly.
Pair Corralation between Granite Construction and Auxico Resources
Considering the 90-day investment horizon Granite Construction is expected to generate 19.95 times less return on investment than Auxico Resources. But when comparing it to its historical volatility, Granite Construction Incorporated is 74.28 times less risky than Auxico Resources. It trades about 0.55 of its potential returns per unit of risk. Auxico Resources Canada is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1.50 in Auxico Resources Canada on August 29, 2024 and sell it today you would lose (0.90) from holding Auxico Resources Canada or give up 60.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Auxico Resources Canada
Performance |
| Timeline |
| Granite Construction |
| Auxico Resources Canada |
Granite Construction and Auxico Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Auxico Resources
The main advantage of trading using opposite Granite Construction and Auxico Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Auxico Resources 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 Auxico Resources will offset losses from the drop in Auxico Resources' long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Auxico Resources vs. Mirasol Resources | Auxico Resources vs. Clean Air Metals | Auxico Resources vs. Equity Metals |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |