Correlation Between 5E Advanced and Graphene Manufacturing
Can any of the company-specific risk be diversified away by investing in both 5E Advanced and Graphene Manufacturing 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 Graphene Manufacturing 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 Graphene Manufacturing Group, you can compare the effects of market volatilities on 5E Advanced and Graphene Manufacturing 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 Graphene Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5E Advanced and Graphene Manufacturing.
Diversification Opportunities for 5E Advanced and Graphene Manufacturing
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between FEAM and Graphene is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding 5E Advanced Materials and Graphene Manufacturing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphene Manufacturing 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 Graphene Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphene Manufacturing has no effect on the direction of 5E Advanced i.e., 5E Advanced and Graphene Manufacturing go up and down completely randomly.
Pair Corralation between 5E Advanced and Graphene Manufacturing
Given the investment horizon of 90 days 5E Advanced Materials is expected to under-perform the Graphene Manufacturing. In addition to that, 5E Advanced is 1.36 times more volatile than Graphene Manufacturing Group. It trades about -0.06 of its total potential returns per unit of risk. Graphene Manufacturing Group is currently generating about -0.02 per unit of volatility. If you would invest 186.00 in Graphene Manufacturing Group on November 4, 2024 and sell it today you would lose (129.00) from holding Graphene Manufacturing Group or give up 69.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
5E Advanced Materials vs. Graphene Manufacturing Group
Performance |
| Timeline |
| 5E Advanced Materials |
| Graphene Manufacturing |
5E Advanced and Graphene Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 5E Advanced and Graphene Manufacturing
The main advantage of trading using opposite 5E Advanced and Graphene Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5E Advanced position performs unexpectedly, Graphene Manufacturing 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 Graphene Manufacturing will offset losses from the drop in Graphene Manufacturing's long position.| 5E Advanced vs. Innospec | 5E Advanced vs. Minerals Technologies | 5E Advanced vs. Oil Dri | 5E Advanced vs. Quaker Chemical |
| Graphene Manufacturing vs. Iofina plc | Graphene Manufacturing vs. Nano One Materials | Graphene Manufacturing vs. Gevo Inc | Graphene Manufacturing vs. Haydale Graphene Industries |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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