Correlation Between Canada Carbon and Graphite One
Can any of the company-specific risk be diversified away by investing in both Canada Carbon and Graphite One 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 Canada Carbon and Graphite One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Canada Carbon and Graphite One, you can compare the effects of market volatilities on Canada Carbon and Graphite One 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 Canada Carbon with a short position of Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of Canada Carbon and Graphite One.
Diversification Opportunities for Canada Carbon and Graphite One
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Canada and Graphite is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Canada Carbon and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One and Canada Carbon 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 Canada Carbon are associated (or correlated) with Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of Canada Carbon i.e., Canada Carbon and Graphite One go up and down completely randomly.
Pair Corralation between Canada Carbon and Graphite One
Assuming the 90 days horizon Canada Carbon is expected to generate 14.04 times more return on investment than Graphite One. However, Canada Carbon is 14.04 times more volatile than Graphite One. It trades about 0.16 of its potential returns per unit of risk. Graphite One is currently generating about -0.02 per unit of risk. If you would invest 2.00 in Canada Carbon on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Canada Carbon or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Canada Carbon vs. Graphite One
Performance |
| Timeline |
| Canada Carbon |
| Graphite One |
Canada Carbon and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Canada Carbon and Graphite One
The main advantage of trading using opposite Canada Carbon and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Canada Carbon position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.| Canada Carbon vs. First Majestic Silver | Canada Carbon vs. Ivanhoe Energy | Canada Carbon vs. Orezone Gold Corp | Canada Carbon vs. Faraday Copper Corp |
| Graphite One vs. Northern Graphite | Graphite One vs. Mason Graphite | Graphite One vs. Focus Graphite | Graphite One vs. Canada Carbon |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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