Correlation Between Focus Graphite and Graphano Energy
Can any of the company-specific risk be diversified away by investing in both Focus Graphite 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 Focus Graphite and Graphano Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Graphano Energy, you can compare the effects of market volatilities on Focus Graphite 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 Focus Graphite with a short position of Graphano Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Graphano Energy.
Diversification Opportunities for Focus Graphite and Graphano Energy
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Focus and Graphano is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Graphano Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphano Energy and Focus Graphite 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 Focus Graphite 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 Focus Graphite i.e., Focus Graphite and Graphano Energy go up and down completely randomly.
Pair Corralation between Focus Graphite and Graphano Energy
Assuming the 90 days horizon Focus Graphite is expected to generate 2.24 times less return on investment than Graphano Energy. In addition to that, Focus Graphite is 1.02 times more volatile than Graphano Energy. It trades about 0.01 of its total potential returns per unit of risk. Graphano Energy is currently generating about 0.02 per unit of volatility. If you would invest 7.71 in Graphano Energy on September 13, 2024 and sell it today you would lose (1.20) from holding Graphano Energy or give up 15.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Focus Graphite vs. Graphano Energy
Performance |
| Timeline |
| Focus Graphite |
| Graphano Energy |
Focus Graphite and Graphano Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Graphano Energy
The main advantage of trading using opposite Focus Graphite and Graphano Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite 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.| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Syrah Resources Limited | Focus Graphite vs. Altura Mining Limited | Focus Graphite vs. Vulcan Minerals |
| Graphano Energy vs. Generation Mining Limited | Graphano Energy vs. Northern Graphite | Graphano Energy vs. Western Resources Corp | Graphano Energy vs. Cypress Development 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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