Correlation Between Great Lakes and Renavotio

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

By analyzing existing cross correlation between Great Lakes Dredge and Renavotio, you can compare the effects of market volatilities on Great Lakes and Renavotio 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 Great Lakes with a short position of Renavotio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Lakes and Renavotio.

Diversification Opportunities for Great Lakes and Renavotio

0.23

Correlation Coefficient

Great Lakes  Renavotio

Modest diversification

The 3 months correlation between Great and Renavotio is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Dredge and Renavotio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renavotio and Great Lakes 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 Great Lakes Dredge are associated (or correlated) with Renavotio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renavotio has no effect on the direction of Great Lakes i.e., Great Lakes and Renavotio go up and down completely randomly.

Pair Corralation between Great Lakes and Renavotio

If you would invest  1,152  in Great Lakes Dredge on October 26, 2024 and sell it today you would earn a total of  65.00  from holding Great Lakes Dredge or generate 5.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.69%
Values	Daily Returns

Great Lakes Dredge  vs.  Renavotio

Great Lakes Dredge

Risk-Adjusted Performance

4 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Great Lakes Dredge are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Great Lakes may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Renavotio

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Great Lakes and Renavotio

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

The idea behind Great Lakes Dredge and Renavotio 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.