Correlation Between Axon Enterprise and Graphano Energy
Can any of the company-specific risk be diversified away by investing in both Axon Enterprise and Graphano Energy 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 Axon Enterprise and Graphano Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axon Enterprise and Graphano Energy, you can compare the effects of market volatilities on Axon Enterprise and Graphano Energy 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 Axon Enterprise with a short position of Graphano Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axon Enterprise and Graphano Energy.
Diversification Opportunities for Axon Enterprise and Graphano Energy
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Axon and Graphano is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Axon Enterprise and Graphano Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphano Energy and Axon Enterprise 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 Axon Enterprise are associated (or correlated) with Graphano Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphano Energy has no effect on the direction of Axon Enterprise i.e., Axon Enterprise and Graphano Energy go up and down completely randomly.
Pair Corralation between Axon Enterprise and Graphano Energy
Given the investment horizon of 90 days Axon Enterprise is expected to generate 0.65 times more return on investment than Graphano Energy. However, Axon Enterprise is 1.54 times less risky than Graphano Energy. It trades about 0.35 of its potential returns per unit of risk. Graphano Energy is currently generating about 0.02 per unit of risk. If you would invest 42,350 in Axon Enterprise on September 1, 2024 and sell it today you would earn a total of 22,346 from holding Axon Enterprise or generate 52.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Axon Enterprise vs. Graphano Energy
Performance |
| Timeline |
| Axon Enterprise |
| Graphano Energy |
Axon Enterprise and Graphano Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axon Enterprise and Graphano Energy
The main advantage of trading using opposite Axon Enterprise and Graphano Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axon Enterprise position performs unexpectedly, Graphano Energy 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 Graphano Energy will offset losses from the drop in Graphano Energy's long position.| Axon Enterprise vs. Novocure | Axon Enterprise vs. HubSpot | Axon Enterprise vs. DigitalOcean Holdings | Axon Enterprise vs. Appian Corp |
| Graphano Energy vs. ATT Inc | Graphano Energy vs. Merck Company | Graphano Energy vs. Walt Disney | Graphano Energy vs. Caterpillar |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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