Correlation Between Vale SA and Granite Creek
Can any of the company-specific risk be diversified away by investing in both Vale SA and Granite Creek 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 Vale SA and Granite Creek into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vale SA ADR and Granite Creek Copper, you can compare the effects of market volatilities on Vale SA and Granite Creek 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 Vale SA with a short position of Granite Creek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vale SA and Granite Creek.
Diversification Opportunities for Vale SA and Granite Creek
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Vale and Granite is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Vale SA ADR and Granite Creek Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Creek Copper and Vale SA 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 Vale SA ADR are associated (or correlated) with Granite Creek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Creek Copper has no effect on the direction of Vale SA i.e., Vale SA and Granite Creek go up and down completely randomly.
Pair Corralation between Vale SA and Granite Creek
Given the investment horizon of 90 days Vale SA ADR is expected to under-perform the Granite Creek. But the stock apears to be less risky and, when comparing its historical volatility, Vale SA ADR is 12.8 times less risky than Granite Creek. The stock trades about -0.26 of its potential returns per unit of risk. The Granite Creek Copper is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1.14 in Granite Creek Copper on October 15, 2024 and sell it today you would earn a total of 0.44 from holding Granite Creek Copper or generate 38.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 94.74% |
| Values | Daily Returns |
Vale SA ADR vs. Granite Creek Copper
Performance |
| Timeline |
| Vale SA ADR |
| Granite Creek Copper |
Vale SA and Granite Creek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vale SA and Granite Creek
The main advantage of trading using opposite Vale SA and Granite Creek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vale SA position performs unexpectedly, Granite Creek 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 Creek will offset losses from the drop in Granite Creek's long position.| Vale SA vs. BHP Group Limited | Vale SA vs. Teck Resources Ltd | Vale SA vs. Lithium Americas Corp | Vale SA vs. MP Materials Corp |
| Granite Creek vs. Macmahon Holdings Limited | Granite Creek vs. Prime Meridian Resources | Granite Creek vs. Rokmaster Resources Corp | Granite Creek vs. Hudson Resources |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Transaction History View history of all your transactions and understand their impact on performance |