Correlation Between Granite Construction and Nordex SE
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Nordex SE 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 Nordex SE 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 Nordex SE, you can compare the effects of market volatilities on Granite Construction and Nordex SE 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 Nordex SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Nordex SE.
Diversification Opportunities for Granite Construction and Nordex SE
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and Nordex is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Nordex SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordex SE 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 Nordex SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordex SE has no effect on the direction of Granite Construction i.e., Granite Construction and Nordex SE go up and down completely randomly.
Pair Corralation between Granite Construction and Nordex SE
If you would invest 8,218 in Granite Construction Incorporated on August 29, 2024 and sell it today you would earn a total of 1,658 from holding Granite Construction Incorporated or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Nordex SE
Performance |
| Timeline |
| Granite Construction |
| Nordex SE |
Granite Construction and Nordex SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Nordex SE
The main advantage of trading using opposite Granite Construction and Nordex SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Nordex SE 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 Nordex SE will offset losses from the drop in Nordex SE's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Nordex SE vs. Shanghai Electric Group | Nordex SE vs. Schneider Electric SA | Nordex SE vs. Xinjiang Goldwind Science | Nordex SE vs. Nordex SE |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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