Correlation Between Granite Construction and Cellink AB
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Cellink AB 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 Cellink AB 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 Cellink AB, you can compare the effects of market volatilities on Granite Construction and Cellink AB 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 Cellink AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Cellink AB.
Diversification Opportunities for Granite Construction and Cellink AB
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Granite and Cellink is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Cellink AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellink AB 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 Cellink AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellink AB has no effect on the direction of Granite Construction i.e., Granite Construction and Cellink AB go up and down completely randomly.
Pair Corralation between Granite Construction and Cellink AB
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.28 times more return on investment than Cellink AB. However, Granite Construction Incorporated is 3.57 times less risky than Cellink AB. It trades about 0.33 of its potential returns per unit of risk. Cellink AB is currently generating about -0.09 per unit of risk. If you would invest 7,393 in Granite Construction Incorporated on August 28, 2024 and sell it today you would earn a total of 2,520 from holding Granite Construction Incorporated or generate 34.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Cellink AB
Performance |
| Timeline |
| Granite Construction |
| Cellink AB |
Granite Construction and Cellink AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Cellink AB
The main advantage of trading using opposite Granite Construction and Cellink AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Cellink AB 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 Cellink AB will offset losses from the drop in Cellink AB's long position.| Granite Construction vs. Innovate Corp | Granite Construction vs. Energy Services | Granite Construction vs. Topbuild Corp |
| Cellink AB vs. Aurora Spine | Cellink AB vs. Armm Inc | Cellink AB vs. Bone Biologics Corp | Cellink AB vs. Anteris Technologies |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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