Correlation Between Granite Construction and Blink Charging
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Blink Charging 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 Blink Charging 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 Blink Charging Co, you can compare the effects of market volatilities on Granite Construction and Blink Charging 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 Blink Charging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Blink Charging.
Diversification Opportunities for Granite Construction and Blink Charging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Granite and Blink is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Blink Charging Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blink Charging 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 Blink Charging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blink Charging has no effect on the direction of Granite Construction i.e., Granite Construction and Blink Charging go up and down completely randomly.
Pair Corralation between Granite Construction and Blink Charging
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.55 times more return on investment than Blink Charging. However, Granite Construction Incorporated is 1.8 times less risky than Blink Charging. It trades about -0.15 of its potential returns per unit of risk. Blink Charging Co is currently generating about -0.41 per unit of risk. If you would invest 9,237 in Granite Construction Incorporated on November 18, 2024 and sell it today you would lose (550.00) from holding Granite Construction Incorporated or give up 5.95% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Blink Charging Co
Performance |
| Timeline |
| Granite Construction |
| Blink Charging |
Granite Construction and Blink Charging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Blink Charging
The main advantage of trading using opposite Granite Construction and Blink Charging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Blink Charging 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 Blink Charging will offset losses from the drop in Blink Charging's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Blink Charging vs. Comfort Systems USA | Blink Charging vs. MasTec Inc | Blink Charging vs. EMCOR Group | Blink Charging vs. Granite Construction Incorporated |
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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