Correlation Between Great Lakes and Southland Holdings

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

Diversification Opportunities for Great Lakes and Southland Holdings

0.54

Correlation Coefficient

Great Lakes  Southland Holdings

Very weak diversification

The 3 months correlation between Great and Southland is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Great Lakes Dredge and Southland Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southland Holdings 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 Southland Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southland Holdings has no effect on the direction of Great Lakes i.e., Great Lakes and Southland Holdings go up and down completely randomly.

Pair Corralation between Great Lakes and Southland Holdings

Given the investment horizon of 90 days Great Lakes is expected to generate 2.38 times less return on investment than Southland Holdings. But when comparing it to its historical volatility, Great Lakes Dredge is 1.32 times less risky than Southland Holdings. It trades about 0.07 of its potential returns per unit of risk. Southland Holdings is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  336.00  in Southland Holdings on May 7, 2025 and sell it today you would earn a total of  67.00  from holding Southland Holdings or generate 19.94% return on investment over 90 days.

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

Great Lakes Dredge  vs.  Southland Holdings

Great Lakes Dredge

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Great Lakes Dredge are ranked lower than 5 (%) 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 September 2025.

Southland Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Southland Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Southland Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Great Lakes and Southland Holdings

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

The idea behind Great Lakes Dredge and Southland Holdings 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.