Correlation Between MARKET VECTR and Granite Construction
Can any of the company-specific risk be diversified away by investing in both MARKET VECTR 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 MARKET VECTR and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MARKET VECTR RETAIL and Granite Construction, you can compare the effects of market volatilities on MARKET VECTR 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 MARKET VECTR with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of MARKET VECTR and Granite Construction.
Diversification Opportunities for MARKET VECTR and Granite Construction
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MARKET and Granite is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding MARKET VECTR RETAIL and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and MARKET VECTR 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 MARKET VECTR RETAIL 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 MARKET VECTR i.e., MARKET VECTR and Granite Construction go up and down completely randomly.
Pair Corralation between MARKET VECTR and Granite Construction
Assuming the 90 days trading horizon MARKET VECTR is expected to generate 1.09 times less return on investment than Granite Construction. But when comparing it to its historical volatility, MARKET VECTR RETAIL is 2.33 times less risky than Granite Construction. It trades about 0.23 of its potential returns per unit of risk. Granite Construction is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,039 in Granite Construction on November 1, 2024 and sell it today you would earn a total of 1,261 from holding Granite Construction or generate 17.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.3% |
| Values | Daily Returns |
MARKET VECTR RETAIL vs. Granite Construction
Performance |
| Timeline |
| MARKET VECTR RETAIL |
| Granite Construction |
MARKET VECTR and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MARKET VECTR and Granite Construction
The main advantage of trading using opposite MARKET VECTR and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MARKET VECTR 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.| MARKET VECTR vs. AEON METALS LTD | MARKET VECTR vs. Fortescue Metals Group | MARKET VECTR vs. American Airlines Group | MARKET VECTR vs. United Airlines Holdings |
| Granite Construction vs. Calibre Mining Corp | Granite Construction vs. Perseus Mining Limited | Granite Construction vs. GLG LIFE TECH | Granite Construction vs. Allegheny Technologies Incorporated |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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