Correlation Between First Graphene and Fuchs Petrolub
Can any of the company-specific risk be diversified away by investing in both First Graphene and Fuchs Petrolub 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 First Graphene and Fuchs Petrolub into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Graphene and Fuchs Petrolub SE, you can compare the effects of market volatilities on First Graphene and Fuchs Petrolub 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 First Graphene with a short position of Fuchs Petrolub. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and Fuchs Petrolub.
Diversification Opportunities for First Graphene and Fuchs Petrolub
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Fuchs is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Fuchs Petrolub SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuchs Petrolub SE and First Graphene 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 First Graphene are associated (or correlated) with Fuchs Petrolub. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuchs Petrolub SE has no effect on the direction of First Graphene i.e., First Graphene and Fuchs Petrolub go up and down completely randomly.
Pair Corralation between First Graphene and Fuchs Petrolub
Assuming the 90 days horizon First Graphene is expected to generate 8.13 times more return on investment than Fuchs Petrolub. However, First Graphene is 8.13 times more volatile than Fuchs Petrolub SE. It trades about 0.04 of its potential returns per unit of risk. Fuchs Petrolub SE is currently generating about 0.05 per unit of risk. If you would invest 7.10 in First Graphene on August 27, 2024 and sell it today you would lose (4.90) from holding First Graphene or give up 69.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Graphene vs. Fuchs Petrolub SE
Performance |
| Timeline |
| First Graphene |
| Fuchs Petrolub SE |
First Graphene and Fuchs Petrolub Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Graphene and Fuchs Petrolub
The main advantage of trading using opposite First Graphene and Fuchs Petrolub positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene position performs unexpectedly, Fuchs Petrolub 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 Fuchs Petrolub will offset losses from the drop in Fuchs Petrolub's long position.| First Graphene vs. Origin Materials | First Graphene vs. BASF SE NA | First Graphene vs. Braskem SA Class | First Graphene vs. Lsb Industries |
| Fuchs Petrolub vs. First Graphene | Fuchs Petrolub vs. HUMANA INC | Fuchs Petrolub vs. Aquagold International | Fuchs Petrolub vs. Barloworld Ltd ADR |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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