Correlation Between Granite Falls and Cardiovascular Systems

Can any of the company-specific risk be diversified away by investing in both Granite Falls and Cardiovascular Systems 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 Granite Falls and Cardiovascular Systems into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Granite Falls Energy and Cardiovascular Systems, you can compare the effects of market volatilities on Granite Falls and Cardiovascular Systems 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 Granite Falls with a short position of Cardiovascular Systems. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Falls and Cardiovascular Systems.

Diversification Opportunities for Granite Falls and Cardiovascular Systems

-0.41

Correlation Coefficient

Granite Falls  Cardiovascular Systems

Very good diversification

The 3 months correlation between Granite and Cardiovascular is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Granite Falls Energy and Cardiovascular Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiovascular Systems and Granite Falls 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 Granite Falls Energy are associated (or correlated) with Cardiovascular Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiovascular Systems has no effect on the direction of Granite Falls i.e., Granite Falls and Cardiovascular Systems go up and down completely randomly.

Pair Corralation between Granite Falls and Cardiovascular Systems

If you would invest (100.00) in Cardiovascular Systems on February 20, 2024 and sell it today you would earn a total of  100.00  from holding Cardiovascular Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.0%
Values	Daily Returns

Granite Falls Energy  vs.  Cardiovascular Systems

Granite Falls Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Granite Falls Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Granite Falls is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Cardiovascular Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardiovascular Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Cardiovascular Systems is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Granite Falls and Cardiovascular Systems

The main advantage of trading using opposite Granite Falls and Cardiovascular Systems positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Falls position performs unexpectedly, Cardiovascular Systems 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 Cardiovascular Systems will offset losses from the drop in Cardiovascular Systems' long position.

The idea behind Granite Falls Energy and Cardiovascular Systems pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.