Correlation Between Granite Creek and Progressive Planet

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

By analyzing existing cross correlation between Granite Creek Copper and Progressive Planet Solutions, you can compare the effects of market volatilities on Granite Creek and Progressive Planet 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 Creek with a short position of Progressive Planet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Creek and Progressive Planet.

Diversification Opportunities for Granite Creek and Progressive Planet

-0.5

Correlation Coefficient

Granite Creek  Progressive Planet

Very good diversification

The 3 months correlation between Granite and Progressive is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Granite Creek Copper and Progressive Planet Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Progressive Planet and Granite Creek 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 Creek Copper are associated (or correlated) with Progressive Planet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Progressive Planet has no effect on the direction of Granite Creek i.e., Granite Creek and Progressive Planet go up and down completely randomly.

Pair Corralation between Granite Creek and Progressive Planet

Assuming the 90 days horizon Granite Creek is expected to generate 8.48 times less return on investment than Progressive Planet. In addition to that, Granite Creek is 1.32 times more volatile than Progressive Planet Solutions. It trades about 0.02 of its total potential returns per unit of risk. Progressive Planet Solutions is currently generating about 0.17 per unit of volatility. If you would invest  7.30  in Progressive Planet Solutions on September 3, 2024 and sell it today you would earn a total of  5.70  from holding Progressive Planet Solutions or generate 78.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Granite Creek Copper  vs.  Progressive Planet Solutions

Granite Creek Copper

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Creek Copper are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Granite Creek may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Progressive Planet

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Progressive Planet Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Progressive Planet reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Granite Creek and Progressive Planet

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

The idea behind Granite Creek Copper and Progressive Planet Solutions 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.