Correlation Between First Graphene and Orbia AdvanceSAB
Can any of the company-specific risk be diversified away by investing in both First Graphene and Orbia AdvanceSAB 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 Orbia AdvanceSAB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Graphene and Orbia Advance, you can compare the effects of market volatilities on First Graphene and Orbia AdvanceSAB 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 Orbia AdvanceSAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and Orbia AdvanceSAB.
Diversification Opportunities for First Graphene and Orbia AdvanceSAB
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between First and Orbia is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Orbia Advance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orbia AdvanceSAB 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 Orbia AdvanceSAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orbia AdvanceSAB has no effect on the direction of First Graphene i.e., First Graphene and Orbia AdvanceSAB go up and down completely randomly.
Pair Corralation between First Graphene and Orbia AdvanceSAB
Assuming the 90 days horizon First Graphene is expected to generate 2.47 times more return on investment than Orbia AdvanceSAB. However, First Graphene is 2.47 times more volatile than Orbia Advance. It trades about 0.02 of its potential returns per unit of risk. Orbia Advance is currently generating about -0.1 per unit of risk. If you would invest 4.10 in First Graphene on September 3, 2024 and sell it today you would lose (2.00) from holding First Graphene or give up 48.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Graphene vs. Orbia Advance
Performance |
| Timeline |
| First Graphene |
| Orbia AdvanceSAB |
First Graphene and Orbia AdvanceSAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Graphene and Orbia AdvanceSAB
The main advantage of trading using opposite First Graphene and Orbia AdvanceSAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene position performs unexpectedly, Orbia AdvanceSAB 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 Orbia AdvanceSAB will offset losses from the drop in Orbia AdvanceSAB's long position.| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials Corp |
| Orbia AdvanceSAB vs. Solvay SA ADR | Orbia AdvanceSAB vs. Dow Inc | Orbia AdvanceSAB vs. Shin Etsu Chemical Co | Orbia AdvanceSAB vs. First Graphene |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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