Correlation Between CKX Lands and Granite Ridge

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

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

Diversification Opportunities for CKX Lands and Granite Ridge

-0.67

Correlation Coefficient

CKX Lands  Granite Ridge

Excellent diversification

The 3 months correlation between CKX and Granite is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CKX Lands and Granite Ridge Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Ridge Resources and CKX Lands 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 CKX Lands are associated (or correlated) with Granite Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Ridge Resources has no effect on the direction of CKX Lands i.e., CKX Lands and Granite Ridge go up and down completely randomly.

Pair Corralation between CKX Lands and Granite Ridge

Considering the 90-day investment horizon CKX Lands is expected to under-perform the Granite Ridge. In addition to that, CKX Lands is 1.06 times more volatile than Granite Ridge Resources. It trades about -0.07 of its total potential returns per unit of risk. Granite Ridge Resources is currently generating about 0.08 per unit of volatility. If you would invest  591.00  in Granite Ridge Resources on September 4, 2024 and sell it today you would earn a total of  50.00  from holding Granite Ridge Resources or generate 8.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	84.38%
Values	Daily Returns

CKX Lands  vs.  Granite Ridge Resources

CKX Lands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CKX Lands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's forward-looking signals remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Granite Ridge Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Ridge Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Granite Ridge may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with CKX Lands and Granite Ridge

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

The idea behind CKX Lands and Granite Ridge Resources 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.