Correlation Between Focus Graphite and Mason Graphite
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Mason Graphite 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 Mason Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Mason Graphite, you can compare the effects of market volatilities on Focus Graphite and Mason Graphite 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 Mason Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Mason Graphite.
Diversification Opportunities for Focus Graphite and Mason Graphite
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Focus and Mason is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Mason Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mason Graphite 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 Mason Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mason Graphite has no effect on the direction of Focus Graphite i.e., Focus Graphite and Mason Graphite go up and down completely randomly.
Pair Corralation between Focus Graphite and Mason Graphite
Assuming the 90 days horizon Focus Graphite is expected to generate 1.92 times more return on investment than Mason Graphite. However, Focus Graphite is 1.92 times more volatile than Mason Graphite. It trades about 0.05 of its potential returns per unit of risk. Mason Graphite is currently generating about -0.35 per unit of risk. If you would invest 6.00 in Focus Graphite on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Focus Graphite or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Graphite vs. Mason Graphite
Performance |
| Timeline |
| Focus Graphite |
| Mason Graphite |
Focus Graphite and Mason Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Mason Graphite
The main advantage of trading using opposite Focus Graphite and Mason Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Mason Graphite 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 Mason Graphite will offset losses from the drop in Mason Graphite's long position.| Focus Graphite vs. Silver Hammer Mining | Focus Graphite vs. Reyna Silver Corp | Focus Graphite vs. Guanajuato Silver | Focus Graphite vs. Silver One Resources |
| Mason Graphite vs. Northern Graphite | Mason Graphite vs. Graphite One | Mason Graphite vs. Lomiko Metals | Mason Graphite vs. IGO Limited |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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