Correlation Between STORE ELECTRONIC and Granite Construction
Can any of the company-specific risk be diversified away by investing in both STORE ELECTRONIC and Granite Construction 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 STORE ELECTRONIC and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STORE ELECTRONIC and Granite Construction, you can compare the effects of market volatilities on STORE ELECTRONIC and Granite Construction 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 STORE ELECTRONIC with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of STORE ELECTRONIC and Granite Construction.
Diversification Opportunities for STORE ELECTRONIC and Granite Construction
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STORE and Granite is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding STORE ELECTRONIC and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and STORE ELECTRONIC 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 STORE ELECTRONIC are associated (or correlated) with Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of STORE ELECTRONIC i.e., STORE ELECTRONIC and Granite Construction go up and down completely randomly.
Pair Corralation between STORE ELECTRONIC and Granite Construction
Assuming the 90 days trading horizon STORE ELECTRONIC is expected to generate 29.79 times less return on investment than Granite Construction. In addition to that, STORE ELECTRONIC is 1.23 times more volatile than Granite Construction. It trades about 0.01 of its total potential returns per unit of risk. Granite Construction is currently generating about 0.18 per unit of volatility. If you would invest 5,527 in Granite Construction on September 3, 2024 and sell it today you would earn a total of 3,723 from holding Granite Construction or generate 67.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STORE ELECTRONIC vs. Granite Construction
Performance |
| Timeline |
| STORE ELECTRONIC |
| Granite Construction |
STORE ELECTRONIC and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STORE ELECTRONIC and Granite Construction
The main advantage of trading using opposite STORE ELECTRONIC and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STORE ELECTRONIC position performs unexpectedly, Granite Construction 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 Granite Construction will offset losses from the drop in Granite Construction's long position.| STORE ELECTRONIC vs. TOTAL GABON | STORE ELECTRONIC vs. Walgreens Boots Alliance | STORE ELECTRONIC vs. Peak Resources Limited |
| Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc | Granite Construction vs. Apple Inc |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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