Correlation Between Focus Graphite and Pershing Resources
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Pershing Resources 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 Pershing Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Pershing Resources, you can compare the effects of market volatilities on Focus Graphite and Pershing Resources 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 Pershing Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Pershing Resources.
Diversification Opportunities for Focus Graphite and Pershing Resources
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Focus and Pershing is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Pershing Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pershing Resources 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 Pershing Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pershing Resources has no effect on the direction of Focus Graphite i.e., Focus Graphite and Pershing Resources go up and down completely randomly.
Pair Corralation between Focus Graphite and Pershing Resources
Assuming the 90 days horizon Focus Graphite is expected to generate 0.8 times more return on investment than Pershing Resources. However, Focus Graphite is 1.25 times less risky than Pershing Resources. It trades about 0.12 of its potential returns per unit of risk. Pershing Resources is currently generating about 0.01 per unit of risk. If you would invest 6.00 in Focus Graphite on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Focus Graphite or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Focus Graphite vs. Pershing Resources
Performance |
| Timeline |
| Focus Graphite |
| Pershing Resources |
Focus Graphite and Pershing Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Pershing Resources
The main advantage of trading using opposite Focus Graphite and Pershing Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Pershing Resources 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 Pershing Resources will offset losses from the drop in Pershing Resources' long position.| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Syrah Resources Limited | Focus Graphite vs. Altura Mining Limited | Focus Graphite vs. Vulcan Minerals |
| Pershing Resources vs. Bravada Gold | Pershing Resources vs. Silver Spruce Resources | Pershing Resources vs. Monitor Ventures | Pershing Resources vs. Euro Manganese |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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