Correlation Between BASF SE and First Graphene
Can any of the company-specific risk be diversified away by investing in both BASF SE and First Graphene 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 BASF SE and First Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASF SE NA and First Graphene, you can compare the effects of market volatilities on BASF SE and First Graphene 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 BASF SE with a short position of First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASF SE and First Graphene.
Diversification Opportunities for BASF SE and First Graphene
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BASF and First is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding BASF SE NA and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene and BASF SE 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 BASF SE NA are associated (or correlated) with First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of BASF SE i.e., BASF SE and First Graphene go up and down completely randomly.
Pair Corralation between BASF SE and First Graphene
Assuming the 90 days horizon BASF SE is expected to generate 7.9 times less return on investment than First Graphene. But when comparing it to its historical volatility, BASF SE NA is 6.21 times less risky than First Graphene. It trades about 0.24 of its potential returns per unit of risk. First Graphene is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2.10 in First Graphene on November 3, 2024 and sell it today you would earn a total of 1.90 from holding First Graphene or generate 90.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BASF SE NA vs. First Graphene
Performance |
| Timeline |
| BASF SE NA |
| First Graphene |
BASF SE and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASF SE and First Graphene
The main advantage of trading using opposite BASF SE and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASF SE position performs unexpectedly, First Graphene 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 First Graphene will offset losses from the drop in First Graphene's long position.| BASF SE vs. Shin Etsu Chemical Co | BASF SE vs. BASF SE ADR | BASF SE vs. Braskem SA Class | BASF SE vs. Celanese |
| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings 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 | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |