Correlation Between KBR and Granite Construction

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

By analyzing existing cross correlation between KBR Inc and Granite Construction Incorporated, you can compare the effects of market volatilities on KBR and Granite Construction 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 KBR with a short position of Granite Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBR and Granite Construction.

Diversification Opportunities for KBR and Granite Construction

-0.79

Correlation Coefficient

KBR  Granite Construction

Pay attention - limited upside

The 3 months correlation between KBR and Granite is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding KBR Inc and Granite Construction Incorpora in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granite Construction and KBR 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 KBR Inc are associated (or correlated) with Granite Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granite Construction has no effect on the direction of KBR i.e., KBR and Granite Construction go up and down completely randomly.

Pair Corralation between KBR and Granite Construction

Considering the 90-day investment horizon KBR Inc is expected to under-perform the Granite Construction. In addition to that, KBR is 1.63 times more volatile than Granite Construction Incorporated. It trades about -0.07 of its total potential returns per unit of risk. Granite Construction Incorporated is currently generating about 0.22 per unit of volatility. If you would invest  8,106  in Granite Construction Incorporated on May 7, 2025 and sell it today you would earn a total of  1,344  from holding Granite Construction Incorporated or generate 16.58% return on investment over 90 days.

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

KBR Inc  vs.  Granite Construction Incorpora

KBR Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days KBR Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest sluggish performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Granite Construction

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Granite Construction Incorporated are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Granite Construction sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KBR and Granite Construction

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

The idea behind KBR Inc and Granite Construction Incorporated 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.