Correlation Between Southland Holdings and Great Lakes
Can any of the company-specific risk be diversified away by investing in both Southland Holdings and Great Lakes 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 Southland Holdings and Great Lakes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southland Holdings and Great Lakes Dredge, you can compare the effects of market volatilities on Southland Holdings and Great Lakes 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 Southland Holdings with a short position of Great Lakes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southland Holdings and Great Lakes.
Diversification Opportunities for Southland Holdings and Great Lakes
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Southland and Great is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Southland Holdings and Great Lakes Dredge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Lakes Dredge and Southland Holdings 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 Southland Holdings are associated (or correlated) with Great Lakes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Lakes Dredge has no effect on the direction of Southland Holdings i.e., Southland Holdings and Great Lakes go up and down completely randomly.
Pair Corralation between Southland Holdings and Great Lakes
Given the investment horizon of 90 days Southland Holdings is expected to under-perform the Great Lakes. In addition to that, Southland Holdings is 1.99 times more volatile than Great Lakes Dredge. It trades about -0.06 of its total potential returns per unit of risk. Great Lakes Dredge is currently generating about 0.11 per unit of volatility. If you would invest 923.00 in Great Lakes Dredge on August 24, 2024 and sell it today you would earn a total of 309.00 from holding Great Lakes Dredge or generate 33.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Southland Holdings vs. Great Lakes Dredge
Performance |
| Timeline |
| Southland Holdings |
| Great Lakes Dredge |
Southland Holdings and Great Lakes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southland Holdings and Great Lakes
The main advantage of trading using opposite Southland Holdings and Great Lakes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southland Holdings position performs unexpectedly, Great Lakes 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 Great Lakes will offset losses from the drop in Great Lakes' long position.| Southland Holdings vs. Emerson Radio | Southland Holdings vs. Flex | Southland Holdings vs. Aerofoam Metals | Southland Holdings vs. Sabre Corpo |
| Great Lakes vs. Primoris Services | Great Lakes vs. Granite Construction Incorporated | Great Lakes vs. MYR Group | Great Lakes vs. Southland Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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