Correlation Between Focus Graphite and OM Holdings
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and OM Holdings 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 OM Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and OM Holdings Limited, you can compare the effects of market volatilities on Focus Graphite and OM Holdings 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 OM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and OM Holdings.
Diversification Opportunities for Focus Graphite and OM Holdings
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Focus and OMHLF is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and OM Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OM Holdings Limited 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 OM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OM Holdings Limited has no effect on the direction of Focus Graphite i.e., Focus Graphite and OM Holdings go up and down completely randomly.
Pair Corralation between Focus Graphite and OM Holdings
Assuming the 90 days horizon Focus Graphite is expected to generate 2.24 times more return on investment than OM Holdings. However, Focus Graphite is 2.24 times more volatile than OM Holdings Limited. It trades about 0.0 of its potential returns per unit of risk. OM Holdings Limited is currently generating about -0.05 per unit of risk. If you would invest 14.00 in Focus Graphite on September 14, 2024 and sell it today you would lose (7.00) from holding Focus Graphite or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Graphite vs. OM Holdings Limited
Performance |
| Timeline |
| Focus Graphite |
| OM Holdings Limited |
Focus Graphite and OM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and OM Holdings
The main advantage of trading using opposite Focus Graphite and OM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, OM Holdings 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 OM Holdings will offset losses from the drop in OM Holdings' long position.| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Syrah Resources Limited | Focus Graphite vs. Altura Mining Limited | Focus Graphite vs. Vulcan Minerals |
| OM Holdings vs. Sherritt International | OM Holdings vs. AMG Advanced Metallurgical | OM Holdings vs. Metals X Limited | OM Holdings vs. Interra Copper 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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