Correlation Between Granite Creek and Green Shift

Can any of the company-specific risk be diversified away by investing in both Granite Creek and Green Shift 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 Green Shift 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 Green Shift Commodities, you can compare the effects of market volatilities on Granite Creek and Green Shift 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 Green Shift. Check out your portfolio center. Please also check ongoing floating volatility patterns of Granite Creek and Green Shift.

Diversification Opportunities for Granite Creek and Green Shift

-0.19

Correlation Coefficient

Granite Creek  Green Shift

Good diversification

The 3 months correlation between Granite and Green is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Granite Creek Copper and Green Shift Commodities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green Shift Commodities 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 Green Shift. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green Shift Commodities has no effect on the direction of Granite Creek i.e., Granite Creek and Green Shift go up and down completely randomly.

Pair Corralation between Granite Creek and Green Shift

Assuming the 90 days horizon Granite Creek Copper is expected to generate 0.69 times more return on investment than Green Shift. However, Granite Creek Copper is 1.46 times less risky than Green Shift. It trades about 0.07 of its potential returns per unit of risk. Green Shift Commodities is currently generating about 0.02 per unit of risk. If you would invest  1.43  in Granite Creek Copper on December 30, 2024 and sell it today you would earn a total of  0.28  from holding Granite Creek Copper or generate 19.58% return on investment over 90 days.

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

Granite Creek Copper  vs.  Green Shift Commodities

Granite Creek Copper

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Creek Copper are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Granite Creek reported solid returns over the last few months and may actually be approaching a breakup point.

Green Shift Commodities

Risk-Adjusted Performance

Weak

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

Pair Trading with Granite Creek and Green Shift

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

The idea behind Granite Creek Copper and Green Shift Commodities 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.