Correlation Between Granite Construction and Tetra Tech
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Tetra Tech 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 Tetra Tech 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 Tetra Tech, you can compare the effects of market volatilities on Granite Construction and Tetra Tech 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 Tetra Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Tetra Tech.
Diversification Opportunities for Granite Construction and Tetra Tech
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Tetra is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Tetra Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tetra Tech 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 Tetra Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tetra Tech has no effect on the direction of Granite Construction i.e., Granite Construction and Tetra Tech go up and down completely randomly.
Pair Corralation between Granite Construction and Tetra Tech
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.43 times more return on investment than Tetra Tech. However, Granite Construction Incorporated is 2.31 times less risky than Tetra Tech. It trades about 0.57 of its potential returns per unit of risk. Tetra Tech is currently generating about -0.23 per unit of risk. If you would invest 8,206 in Granite Construction Incorporated on August 31, 2024 and sell it today you would earn a total of 1,663 from holding Granite Construction Incorporated or generate 20.27% 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. Tetra Tech
Performance |
| Timeline |
| Granite Construction |
| Tetra Tech |
Granite Construction and Tetra Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Tetra Tech
The main advantage of trading using opposite Granite Construction and Tetra Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Tetra Tech 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 Tetra Tech will offset losses from the drop in Tetra Tech's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Tetra Tech vs. Jacobs Solutions | Tetra Tech vs. KBR Inc | Tetra Tech vs. Fluor | Tetra Tech vs. Topbuild 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Stocks Directory Find actively traded stocks across global markets |