Correlation Between Applied Graphene and Orica
Can any of the company-specific risk be diversified away by investing in both Applied Graphene and Orica 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 Orica 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 Orica Ltd ADR, you can compare the effects of market volatilities on Applied Graphene and Orica 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 Orica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Graphene and Orica.
Diversification Opportunities for Applied Graphene and Orica
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Applied and Orica is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and Orica Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orica Ltd 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 Orica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orica Ltd ADR has no effect on the direction of Applied Graphene i.e., Applied Graphene and Orica go up and down completely randomly.
Pair Corralation between Applied Graphene and Orica
If you would invest 1,187 in Orica Ltd ADR on August 30, 2024 and sell it today you would lose (6.00) from holding Orica Ltd ADR or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Applied Graphene Materials vs. Orica Ltd ADR
Performance |
| Timeline |
| Applied Graphene Mat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Orica Ltd ADR |
Applied Graphene and Orica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Applied Graphene and Orica
The main advantage of trading using opposite Applied Graphene and Orica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Graphene position performs unexpectedly, Orica 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 Orica will offset losses from the drop in Orica'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 |
| Orica vs. Green Star Products | Orica vs. Greystone Logistics | Orica vs. Iofina plc | Orica 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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