Correlation Between Granite Construction and Enduro Metals
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Enduro Metals 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 Enduro Metals 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 Enduro Metals, you can compare the effects of market volatilities on Granite Construction and Enduro Metals 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 Enduro Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Enduro Metals.
Diversification Opportunities for Granite Construction and Enduro Metals
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and Enduro is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Enduro Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enduro Metals 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 Enduro Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enduro Metals has no effect on the direction of Granite Construction i.e., Granite Construction and Enduro Metals go up and down completely randomly.
Pair Corralation between Granite Construction and Enduro Metals
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.23 times more return on investment than Enduro Metals. However, Granite Construction Incorporated is 4.27 times less risky than Enduro Metals. It trades about 0.27 of its potential returns per unit of risk. Enduro Metals is currently generating about -0.05 per unit of risk. If you would invest 6,106 in Granite Construction Incorporated on August 31, 2024 and sell it today you would earn a total of 3,831 from holding Granite Construction Incorporated or generate 62.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Enduro Metals
Performance |
| Timeline |
| Granite Construction |
| Enduro Metals |
Granite Construction and Enduro Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Enduro Metals
The main advantage of trading using opposite Granite Construction and Enduro Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Enduro Metals 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 Enduro Metals will offset losses from the drop in Enduro Metals' long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Enduro Metals vs. Scottie Resources Corp | Enduro Metals vs. Defiance Silver Corp | Enduro Metals vs. HUMANA INC | Enduro Metals 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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