Correlation Between Granite Construction and Leviathan Gold
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Leviathan Gold 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 Leviathan Gold 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 Leviathan Gold, you can compare the effects of market volatilities on Granite Construction and Leviathan Gold 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 Leviathan Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Leviathan Gold.
Diversification Opportunities for Granite Construction and Leviathan Gold
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Leviathan is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Leviathan Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leviathan Gold 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 Leviathan Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leviathan Gold has no effect on the direction of Granite Construction i.e., Granite Construction and Leviathan Gold go up and down completely randomly.
Pair Corralation between Granite Construction and Leviathan Gold
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.21 times more return on investment than Leviathan Gold. However, Granite Construction Incorporated is 4.86 times less risky than Leviathan Gold. It trades about 0.55 of its potential returns per unit of risk. Leviathan Gold is currently generating about 0.06 per unit of risk. If you would invest 8,405 in Granite Construction Incorporated on September 1, 2024 and sell it today you would earn a total of 1,532 from holding Granite Construction Incorporated or generate 18.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Leviathan Gold
Performance |
| Timeline |
| Granite Construction |
| Leviathan Gold |
Granite Construction and Leviathan Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Leviathan Gold
The main advantage of trading using opposite Granite Construction and Leviathan Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Leviathan Gold 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 Leviathan Gold will offset losses from the drop in Leviathan Gold's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Leviathan Gold vs. Montage Gold Corp | Leviathan Gold vs. KORE Mining | Leviathan Gold vs. Cabral Gold | Leviathan Gold vs. Independence Gold Corp |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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