Correlation Between 5E Advanced and Applied Graphene
Can any of the company-specific risk be diversified away by investing in both 5E Advanced and Applied Graphene 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 5E Advanced and Applied Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 5E Advanced Materials and Applied Graphene Materials, you can compare the effects of market volatilities on 5E Advanced and Applied Graphene 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 5E Advanced with a short position of Applied Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5E Advanced and Applied Graphene.
Diversification Opportunities for 5E Advanced and Applied Graphene
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between FEAM and Applied is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding 5E Advanced Materials and Applied Graphene Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Graphene Mat and 5E Advanced 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 5E Advanced Materials are associated (or correlated) with Applied Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Graphene Mat has no effect on the direction of 5E Advanced i.e., 5E Advanced and Applied Graphene go up and down completely randomly.
Pair Corralation between 5E Advanced and Applied Graphene
Given the investment horizon of 90 days 5E Advanced Materials is expected to under-perform the Applied Graphene. But the stock apears to be less risky and, when comparing its historical volatility, 5E Advanced Materials is 19.47 times less risky than Applied Graphene. The stock trades about -0.05 of its potential returns per unit of risk. The Applied Graphene Materials is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Applied Graphene Materials on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Applied Graphene Materials or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.32% |
| Values | Daily Returns |
5E Advanced Materials vs. Applied Graphene Materials
Performance |
| Timeline |
| 5E Advanced Materials |
| Applied Graphene Mat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
5E Advanced and Applied Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 5E Advanced and Applied Graphene
The main advantage of trading using opposite 5E Advanced and Applied Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5E Advanced position performs unexpectedly, Applied Graphene 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 Applied Graphene will offset losses from the drop in Applied Graphene's long position.| 5E Advanced vs. Kronos Worldwide | 5E Advanced vs. Sensient Technologies | 5E Advanced vs. Element Solutions | 5E Advanced vs. Trinseo SA |
| Applied Graphene vs. First Graphene | Applied Graphene vs. Haydale Graphene Industries | Applied Graphene vs. G6 Materials Corp | Applied Graphene vs. Versarien plc |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets |