Correlation Between Granite Construction and US Nuclear
Can any of the company-specific risk be diversified away by investing in both Granite Construction and US Nuclear 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 US Nuclear 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 US Nuclear Corp, you can compare the effects of market volatilities on Granite Construction and US Nuclear 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 US Nuclear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and US Nuclear.
Diversification Opportunities for Granite Construction and US Nuclear
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Granite and UCLE is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and US Nuclear Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Nuclear Corp 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 US Nuclear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Nuclear Corp has no effect on the direction of Granite Construction i.e., Granite Construction and US Nuclear go up and down completely randomly.
Pair Corralation between Granite Construction and US Nuclear
Considering the 90-day investment horizon Granite Construction is expected to generate 21.65 times less return on investment than US Nuclear. But when comparing it to its historical volatility, Granite Construction Incorporated is 31.88 times less risky than US Nuclear. It trades about 0.13 of its potential returns per unit of risk. US Nuclear Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 11.00 in US Nuclear Corp on August 31, 2024 and sell it today you would lose (7.90) from holding US Nuclear Corp or give up 71.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction Incorpora vs. US Nuclear Corp
Performance |
| Timeline |
| Granite Construction |
| US Nuclear Corp |
Granite Construction and US Nuclear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and US Nuclear
The main advantage of trading using opposite Granite Construction and US Nuclear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, US Nuclear 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 US Nuclear will offset losses from the drop in US Nuclear's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| US Nuclear vs. Sono Tek Corp | US Nuclear vs. Novanta | US Nuclear vs. ESCO Technologies | US Nuclear vs. Vontier 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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