Correlation Between Applied Graphene and Nanophase Technol
Can any of the company-specific risk be diversified away by investing in both Applied Graphene and Nanophase Technol 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 Nanophase Technol 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 Nanophase Technol, you can compare the effects of market volatilities on Applied Graphene and Nanophase Technol 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 Nanophase Technol. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Graphene and Nanophase Technol.
Diversification Opportunities for Applied Graphene and Nanophase Technol
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Applied and Nanophase is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and Nanophase Technol in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nanophase Technol 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 Nanophase Technol. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nanophase Technol has no effect on the direction of Applied Graphene i.e., Applied Graphene and Nanophase Technol go up and down completely randomly.
Pair Corralation between Applied Graphene and Nanophase Technol
Assuming the 90 days horizon Applied Graphene Materials is expected to generate 9.46 times more return on investment than Nanophase Technol. However, Applied Graphene is 9.46 times more volatile than Nanophase Technol. It trades about 0.1 of its potential returns per unit of risk. Nanophase Technol is currently generating about 0.16 per unit of risk. If you would invest 8.00 in Applied Graphene Materials on August 30, 2024 and sell it today you would lose (7.99) from holding Applied Graphene Materials or give up 99.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 14.52% |
| Values | Daily Returns |
Applied Graphene Materials vs. Nanophase Technol
Performance |
| Timeline |
| Applied Graphene Mat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nanophase Technol |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Applied Graphene and Nanophase Technol Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Graphene and Nanophase Technol
The main advantage of trading using opposite Applied Graphene and Nanophase Technol positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Graphene position performs unexpectedly, Nanophase Technol 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 Nanophase Technol will offset losses from the drop in Nanophase Technol'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 |
| Nanophase Technol vs. Iofina plc | Nanophase Technol vs. Green Star Products | Nanophase Technol vs. Greystone Logistics | Nanophase Technol vs. Crown Electrokinetics Corp |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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