Correlation Between Focus Graphite and York Harbour
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and York Harbour 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 York Harbour into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and York Harbour Metals, you can compare the effects of market volatilities on Focus Graphite and York Harbour 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 York Harbour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and York Harbour.
Diversification Opportunities for Focus Graphite and York Harbour
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and York is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and York Harbour Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on York Harbour Metals 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 York Harbour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of York Harbour Metals has no effect on the direction of Focus Graphite i.e., Focus Graphite and York Harbour go up and down completely randomly.
Pair Corralation between Focus Graphite and York Harbour
Assuming the 90 days horizon Focus Graphite is expected to generate 1.67 times less return on investment than York Harbour. But when comparing it to its historical volatility, Focus Graphite is 2.78 times less risky than York Harbour. It trades about 0.12 of its potential returns per unit of risk. York Harbour Metals is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 5.43 in York Harbour Metals on September 13, 2024 and sell it today you would lose (2.37) from holding York Harbour Metals or give up 43.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Focus Graphite vs. York Harbour Metals
Performance |
| Timeline |
| Focus Graphite |
| York Harbour Metals |
Focus Graphite and York Harbour Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and York Harbour
The main advantage of trading using opposite Focus Graphite and York Harbour positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, York Harbour 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 York Harbour will offset losses from the drop in York Harbour'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 |
| York Harbour vs. Qubec Nickel Corp | York Harbour vs. IGO Limited | York Harbour vs. Focus Graphite | York Harbour vs. Mineral Res |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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