Correlation Between Granite Construction and Windrock Land
Can any of the company-specific risk be diversified away by investing in both Granite Construction and Windrock Land 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 Windrock Land 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 Windrock Land Co, you can compare the effects of market volatilities on Granite Construction and Windrock Land 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 Windrock Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Construction and Windrock Land.
Diversification Opportunities for Granite Construction and Windrock Land
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Granite and Windrock is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Granite Construction Incorpora and Windrock Land Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Windrock Land 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 Windrock Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Windrock Land has no effect on the direction of Granite Construction i.e., Granite Construction and Windrock Land go up and down completely randomly.
Pair Corralation between Granite Construction and Windrock Land
Considering the 90-day investment horizon Granite Construction Incorporated is expected to generate 0.59 times more return on investment than Windrock Land. However, Granite Construction Incorporated is 1.69 times less risky than Windrock Land. It trades about 0.26 of its potential returns per unit of risk. Windrock Land Co is currently generating about 0.0 per unit of risk. If you would invest 4,532 in Granite Construction Incorporated on August 29, 2024 and sell it today you would earn a total of 5,344 from holding Granite Construction Incorporated or generate 117.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Granite Construction Incorpora vs. Windrock Land Co
Performance |
| Timeline |
| Granite Construction |
| Windrock Land |
Granite Construction and Windrock Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Granite Construction and Windrock Land
The main advantage of trading using opposite Granite Construction and Windrock Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Construction position performs unexpectedly, Windrock Land 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 Windrock Land will offset losses from the drop in Windrock Land's long position.| Granite Construction vs. EMCOR Group | Granite Construction vs. Comfort Systems USA | Granite Construction vs. Primoris Services | Granite Construction vs. Construction Partners |
| Windrock Land vs. Pardee Resources Co | Windrock Land vs. Merchants National Properties | Windrock Land vs. Beaver Coal Co | Windrock Land vs. The Reserve Petroleum |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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