Correlation Between BANK CENTRAL and GrafTech International
Can any of the company-specific risk be diversified away by investing in both BANK CENTRAL and GrafTech International 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 BANK CENTRAL and GrafTech International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BANK CENTRAL ASIA and GrafTech International, you can compare the effects of market volatilities on BANK CENTRAL and GrafTech International 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 BANK CENTRAL with a short position of GrafTech International. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK CENTRAL and GrafTech International.
Diversification Opportunities for BANK CENTRAL and GrafTech International
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BANK and GrafTech is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding BANK CENTRAL ASIA and GrafTech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrafTech International and BANK CENTRAL 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 BANK CENTRAL ASIA are associated (or correlated) with GrafTech International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrafTech International has no effect on the direction of BANK CENTRAL i.e., BANK CENTRAL and GrafTech International go up and down completely randomly.
Pair Corralation between BANK CENTRAL and GrafTech International
Assuming the 90 days trading horizon BANK CENTRAL ASIA is expected to generate 0.3 times more return on investment than GrafTech International. However, BANK CENTRAL ASIA is 3.37 times less risky than GrafTech International. It trades about 0.02 of its potential returns per unit of risk. GrafTech International is currently generating about -0.01 per unit of risk. If you would invest 50.00 in BANK CENTRAL ASIA on September 24, 2024 and sell it today you would earn a total of 5.00 from holding BANK CENTRAL ASIA or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK CENTRAL ASIA vs. GrafTech International
Performance |
| Timeline |
| BANK CENTRAL ASIA |
| GrafTech International |
BANK CENTRAL and GrafTech International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK CENTRAL and GrafTech International
The main advantage of trading using opposite BANK CENTRAL and GrafTech International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK CENTRAL position performs unexpectedly, GrafTech International 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 GrafTech International will offset losses from the drop in GrafTech International's long position.| BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Apple Inc | BANK CENTRAL vs. Microsoft |
| GrafTech International vs. Evolution Mining Limited | GrafTech International vs. American Airlines Group | GrafTech International vs. Clean Energy Fuels | GrafTech International vs. ALERION CLEANPOWER |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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