Correlation Between Granite Construction and Odyssey Semiconductor
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Odyssey Semiconductor 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 Odyssey Semiconductor 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 Odyssey Semiconductor Technologies, you can compare the effects of market volatilities on Granite Construction and Odyssey Semiconductor 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 Odyssey Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Odyssey Semiconductor.
Diversification Opportunities for Granite Construction and Odyssey Semiconductor
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Granite and Odyssey is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Odyssey Semiconductor Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Odyssey Semiconductor 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 Odyssey Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Odyssey Semiconductor has no effect on the direction of Granite Construction i.e., Granite Construction and Odyssey Semiconductor go up and down completely randomly.
Pair Corralation between Granite Construction and Odyssey Semiconductor
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.18 times more return on investment than Odyssey Semiconductor. However, Granite Construction Incorporated is 5.59 times less risky than Odyssey Semiconductor. It trades about 0.25 of its potential returns per unit of risk. Odyssey Semiconductor Technologies is currently generating about -0.01 per unit of risk. If you would invest 6,206 in Granite Construction Incorporated on August 29, 2024 and sell it today you would earn a total of 3,670 from holding Granite Construction Incorporated or generate 59.14% 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. Odyssey Semiconductor Technolo
Performance |
| Timeline |
| Granite Construction |
| Odyssey Semiconductor |
Granite Construction and Odyssey Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Odyssey Semiconductor
The main advantage of trading using opposite Granite Construction and Odyssey Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Odyssey Semiconductor 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 Odyssey Semiconductor will offset losses from the drop in Odyssey Semiconductor's long position.| Granite Construction vs. Innovate Corp | Granite Construction vs. Energy Services | Granite Construction vs. Topbuild Corp |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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