Correlation Between OPKO HEALTH and Granite Construction
Can any of the company-specific risk be diversified away by investing in both OPKO HEALTH 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 OPKO HEALTH and Granite Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OPKO HEALTH and Granite Construction, you can compare the effects of market volatilities on OPKO HEALTH 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 OPKO HEALTH with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of OPKO HEALTH and Granite Construction.
Diversification Opportunities for OPKO HEALTH and Granite Construction
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between OPKO and Granite is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding OPKO HEALTH and Granite Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and OPKO HEALTH 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 OPKO HEALTH 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 OPKO HEALTH i.e., OPKO HEALTH and Granite Construction go up and down completely randomly.
Pair Corralation between OPKO HEALTH and Granite Construction
Assuming the 90 days trading horizon OPKO HEALTH is expected to under-perform the Granite Construction. But the stock apears to be less risky and, when comparing its historical volatility, OPKO HEALTH is 1.04 times less risky than Granite Construction. The stock trades about -0.33 of its potential returns per unit of risk. The Granite Construction is currently generating about -0.29 of returns per unit of risk over similar time horizon. If you would invest 8,886 in Granite Construction on October 14, 2024 and sell it today you would lose (436.00) from holding Granite Construction or give up 4.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
OPKO HEALTH vs. Granite Construction
Performance |
| Timeline |
| OPKO HEALTH |
| Granite Construction |
OPKO HEALTH and Granite Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OPKO HEALTH and Granite Construction
The main advantage of trading using opposite OPKO HEALTH and Granite Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OPKO HEALTH 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.| OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc | OPKO HEALTH vs. Apple Inc |
| Granite Construction vs. Lendlease Group | Granite Construction vs. Mobilezone Holding AG | Granite Construction vs. Geely Automobile Holdings | Granite Construction vs. OPKO HEALTH |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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