Correlation Between Granite Falls and Lafargeholcim
Can any of the company-specific risk be diversified away by investing in both Granite Falls and Lafargeholcim 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 Lafargeholcim 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 Lafargeholcim Ltd ADR, you can compare the effects of market volatilities on Granite Falls and Lafargeholcim 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 Lafargeholcim. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Falls and Lafargeholcim.
Diversification Opportunities for Granite Falls and Lafargeholcim
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Granite and Lafargeholcim is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Granite Falls Energy and Lafargeholcim Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lafargeholcim ADR 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 Lafargeholcim. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lafargeholcim ADR has no effect on the direction of Granite Falls i.e., Granite Falls and Lafargeholcim go up and down completely randomly.
Pair Corralation between Granite Falls and Lafargeholcim
Given the investment horizon of 90 days Granite Falls is expected to generate 151.11 times less return on investment than Lafargeholcim. In addition to that, Granite Falls is 1.31 times more volatile than Lafargeholcim Ltd ADR. It trades about 0.0 of its total potential returns per unit of risk. Lafargeholcim Ltd ADR is currently generating about 0.11 per unit of volatility. If you would invest 1,315 in Lafargeholcim Ltd ADR on February 13, 2024 and sell it today you would earn a total of 490.00 from holding Lafargeholcim Ltd ADR or generate 37.26% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Granite Falls Energy vs. Lafargeholcim Ltd ADR
Performance |
Timeline |
Granite Falls Energy |
Lafargeholcim ADR |
Granite Falls and Lafargeholcim Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Granite Falls and Lafargeholcim
The main advantage of trading using opposite Granite Falls and Lafargeholcim positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Granite Falls position performs unexpectedly, Lafargeholcim 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 Lafargeholcim will offset losses from the drop in Lafargeholcim's long position.Granite Falls vs. Pinterest | Granite Falls vs. Pentair PLC | Granite Falls vs. AerSale Corp | Granite Falls vs. Grupo Aeroportuario del |
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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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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