Correlation Between Great Lakes and Target Hospitality
Can any of the company-specific risk be diversified away by investing in both Great Lakes and Target Hospitality 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 Target Hospitality 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 Target Hospitality Corp, you can compare the effects of market volatilities on Great Lakes and Target Hospitality 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 Target Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Lakes and Target Hospitality.
Diversification Opportunities for Great Lakes and Target Hospitality
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Great and Target is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Dredge and Target Hospitality Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Hospitality Corp 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 Target Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Hospitality Corp has no effect on the direction of Great Lakes i.e., Great Lakes and Target Hospitality go up and down completely randomly.
Pair Corralation between Great Lakes and Target Hospitality
Given the investment horizon of 90 days Great Lakes Dredge is expected to generate 0.73 times more return on investment than Target Hospitality. However, Great Lakes Dredge is 1.36 times less risky than Target Hospitality. It trades about 0.09 of its potential returns per unit of risk. Target Hospitality Corp is currently generating about 0.0 per unit of risk. If you would invest 1,198 in Great Lakes Dredge on September 10, 2025 and sell it today you would earn a total of 158.00 from holding Great Lakes Dredge or generate 13.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Lakes Dredge vs. Target Hospitality Corp
Performance |
| Timeline |
| Great Lakes Dredge |
| Target Hospitality Corp |
Great Lakes and Target Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Lakes and Target Hospitality
The main advantage of trading using opposite Great Lakes and Target Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Lakes position performs unexpectedly, Target Hospitality 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 Target Hospitality will offset losses from the drop in Target Hospitality's long position.| Great Lakes vs. Bowman Consulting Group | Great Lakes vs. Apogee Enterprises | Great Lakes vs. National Presto Industries | Great Lakes vs. Cresud SACIF y |
| Target Hospitality vs. Nordic American Tankers | Target Hospitality vs. Bowman Consulting Group | Target Hospitality vs. Great Lakes Dredge | Target Hospitality vs. Apogee Enterprises |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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