Correlation Between First Graphene and Iofina Plc
Can any of the company-specific risk be diversified away by investing in both First Graphene and Iofina Plc 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 Iofina Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Graphene and Iofina plc, you can compare the effects of market volatilities on First Graphene and Iofina Plc 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 Iofina Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and Iofina Plc.
Diversification Opportunities for First Graphene and Iofina Plc
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Iofina is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Iofina plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iofina plc 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 Iofina Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iofina plc has no effect on the direction of First Graphene i.e., First Graphene and Iofina Plc go up and down completely randomly.
Pair Corralation between First Graphene and Iofina Plc
Assuming the 90 days horizon First Graphene is expected to generate 3.52 times more return on investment than Iofina Plc. However, First Graphene is 3.52 times more volatile than Iofina plc. It trades about 0.04 of its potential returns per unit of risk. Iofina plc is currently generating about 0.02 per unit of risk. If you would invest 7.60 in First Graphene on August 30, 2024 and sell it today you would lose (5.10) from holding First Graphene or give up 67.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Graphene vs. Iofina plc
Performance |
| Timeline |
| First Graphene |
| Iofina plc |
First Graphene and Iofina Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Graphene and Iofina Plc
The main advantage of trading using opposite First Graphene and Iofina Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene position performs unexpectedly, Iofina Plc 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 Iofina Plc will offset losses from the drop in Iofina Plc's long position.| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials Corp |
| Iofina Plc vs. Akzo Nobel NV | Iofina Plc vs. Avoca LLC | Iofina Plc vs. Arkema SA ADR | Iofina Plc vs. HUMANA INC |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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