Correlation Between Granite Construction and Western Alaska
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Western Alaska 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 Western Alaska 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 Western Alaska Minerals, you can compare the effects of market volatilities on Granite Construction and Western Alaska 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 Western Alaska. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Western Alaska.
Diversification Opportunities for Granite Construction and Western Alaska
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Western is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Western Alaska Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Alaska Minerals 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 Western Alaska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Alaska Minerals has no effect on the direction of Granite Construction i.e., Granite Construction and Western Alaska go up and down completely randomly.
Pair Corralation between Granite Construction and Western Alaska
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.2 times more return on investment than Western Alaska. However, Granite Construction Incorporated is 4.89 times less risky than Western Alaska. It trades about 0.13 of its potential returns per unit of risk. Western Alaska Minerals is currently generating about 0.0 per unit of risk. If you would invest 3,494 in Granite Construction Incorporated on August 30, 2024 and sell it today you would earn a total of 6,375 from holding Granite Construction Incorporated or generate 182.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Western Alaska Minerals
Performance |
| Timeline |
| Granite Construction |
| Western Alaska Minerals |
Granite Construction and Western Alaska Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Western Alaska
The main advantage of trading using opposite Granite Construction and Western Alaska positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Western Alaska 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 Western Alaska will offset losses from the drop in Western Alaska's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Western Alaska vs. First Tellurium Corp | Western Alaska vs. Max Resource Corp | Western Alaska vs. P2 Gold | Western Alaska vs. CMC Metals |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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