Correlation Between Applied Graphene and Alto Ingredients
Can any of the company-specific risk be diversified away by investing in both Applied Graphene and Alto Ingredients 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 Applied Graphene and Alto Ingredients into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Applied Graphene Materials and Alto Ingredients, you can compare the effects of market volatilities on Applied Graphene and Alto Ingredients 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 Applied Graphene with a short position of Alto Ingredients. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Graphene and Alto Ingredients.
Diversification Opportunities for Applied Graphene and Alto Ingredients
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Applied and Alto is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and Alto Ingredients in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alto Ingredients and Applied Graphene 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 Applied Graphene Materials are associated (or correlated) with Alto Ingredients. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alto Ingredients has no effect on the direction of Applied Graphene i.e., Applied Graphene and Alto Ingredients go up and down completely randomly.
Pair Corralation between Applied Graphene and Alto Ingredients
Assuming the 90 days horizon Applied Graphene Materials is expected to generate 18.71 times more return on investment than Alto Ingredients. However, Applied Graphene is 18.71 times more volatile than Alto Ingredients. It trades about 0.09 of its potential returns per unit of risk. Alto Ingredients is currently generating about 0.01 per unit of risk. If you would invest 5.00 in Applied Graphene Materials on August 31, 2024 and sell it today you would lose (4.99) from holding Applied Graphene Materials or give up 99.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 93.58% |
| Values | Daily Returns |
Applied Graphene Materials vs. Alto Ingredients
Performance |
| Timeline |
| Applied Graphene Mat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Alto Ingredients |
Applied Graphene and Alto Ingredients Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Graphene and Alto Ingredients
The main advantage of trading using opposite Applied Graphene and Alto Ingredients positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Graphene position performs unexpectedly, Alto Ingredients 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 Alto Ingredients will offset losses from the drop in Alto Ingredients' long position.| Applied Graphene vs. First Graphene | Applied Graphene vs. Haydale Graphene Industries | Applied Graphene vs. G6 Materials Corp | Applied Graphene vs. Versarien plc |
| Alto Ingredients vs. Oil Dri | Alto Ingredients vs. FutureFuel Corp | Alto Ingredients vs. Quaker Chemical | Alto Ingredients vs. Koppers Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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