Correlation Between Granite Construction and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Vinci SA 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 Vinci SA 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 Vinci SA ADR, you can compare the effects of market volatilities on Granite Construction and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Vinci SA.
Diversification Opportunities for Granite Construction and Vinci SA
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and Vinci is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Vinci SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA ADR 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA ADR has no effect on the direction of Granite Construction i.e., Granite Construction and Vinci SA go up and down completely randomly.
Pair Corralation between Granite Construction and Vinci SA
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 1.62 times more return on investment than Vinci SA. However, Granite Construction is 1.62 times more volatile than Vinci SA ADR. It trades about 0.53 of its potential returns per unit of risk. Vinci SA ADR is currently generating about -0.38 per unit of risk. If you would invest 8,253 in Granite Construction Incorporated on August 30, 2024 and sell it today you would earn a total of 1,616 from holding Granite Construction Incorporated or generate 19.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Vinci SA ADR
Performance |
| Timeline |
| Granite Construction |
| Vinci SA ADR |
Granite Construction and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Vinci SA
The main advantage of trading using opposite Granite Construction and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Vinci SA vs. Arcadis NV | Vinci SA vs. KBR Inc | Vinci SA vs. Orion Group Holdings | Vinci SA vs. Jacobs Solutions |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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