Correlation Between Applied Graphene and Givaudan
Can any of the company-specific risk be diversified away by investing in both Applied Graphene and Givaudan 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 Givaudan 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 Givaudan SA ADR, you can compare the effects of market volatilities on Applied Graphene and Givaudan 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 Givaudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Graphene and Givaudan.
Diversification Opportunities for Applied Graphene and Givaudan
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Applied and Givaudan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and Givaudan SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Givaudan SA ADR 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 Givaudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Givaudan SA ADR has no effect on the direction of Applied Graphene i.e., Applied Graphene and Givaudan go up and down completely randomly.
Pair Corralation between Applied Graphene and Givaudan
Assuming the 90 days horizon Applied Graphene Materials is expected to generate 76.27 times more return on investment than Givaudan. However, Applied Graphene is 76.27 times more volatile than Givaudan SA ADR. It trades about 0.09 of its potential returns per unit of risk. Givaudan SA ADR is currently generating about 0.07 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 Against |
| Strength | Very Weak |
| Accuracy | 93.58% |
| Values | Daily Returns |
Applied Graphene Materials vs. Givaudan SA ADR
Performance |
| Timeline |
| Applied Graphene Mat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Givaudan SA ADR |
Applied Graphene and Givaudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Graphene and Givaudan
The main advantage of trading using opposite Applied Graphene and Givaudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Graphene position performs unexpectedly, Givaudan 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 Givaudan will offset losses from the drop in Givaudan's long position.| Applied Graphene vs. First Graphene | Applied Graphene vs. Haydale Graphene Industries | Applied Graphene vs. G6 Materials Corp | Applied Graphene vs. Versarien plc |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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