Correlation Between 5E Advanced and G6 Materials
Can any of the company-specific risk be diversified away by investing in both 5E Advanced and G6 Materials 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 G6 Materials 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 G6 Materials Corp, you can compare the effects of market volatilities on 5E Advanced and G6 Materials 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 G6 Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of 5E Advanced and G6 Materials.
Diversification Opportunities for 5E Advanced and G6 Materials
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FEAM and GPHBF is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding 5E Advanced Materials and G6 Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G6 Materials Corp 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 G6 Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G6 Materials Corp has no effect on the direction of 5E Advanced i.e., 5E Advanced and G6 Materials go up and down completely randomly.
Pair Corralation between 5E Advanced and G6 Materials
Given the investment horizon of 90 days 5E Advanced Materials is expected to under-perform the G6 Materials. But the stock apears to be less risky and, when comparing its historical volatility, 5E Advanced Materials is 1.43 times less risky than G6 Materials. The stock trades about -0.05 of its potential returns per unit of risk. The G6 Materials Corp is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 11.00 in G6 Materials Corp on September 2, 2024 and sell it today you would lose (8.00) from holding G6 Materials Corp or give up 72.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
5E Advanced Materials vs. G6 Materials Corp
Performance |
| Timeline |
| 5E Advanced Materials |
| G6 Materials Corp |
5E Advanced and G6 Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 5E Advanced and G6 Materials
The main advantage of trading using opposite 5E Advanced and G6 Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 5E Advanced position performs unexpectedly, G6 Materials 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 G6 Materials will offset losses from the drop in G6 Materials' long position.| 5E Advanced vs. Kronos Worldwide | 5E Advanced vs. Sensient Technologies | 5E Advanced vs. Element Solutions | 5E Advanced vs. Trinseo SA |
| G6 Materials vs. Versarien plc | G6 Materials vs. Graphene Manufacturing Group | G6 Materials vs. 5E Advanced Materials | G6 Materials 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |