Correlation Between First Graphene and Autosports
Can any of the company-specific risk be diversified away by investing in both First Graphene and Autosports 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 Autosports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Graphene and Autosports Group, you can compare the effects of market volatilities on First Graphene and Autosports 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 Autosports. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and Autosports.
Diversification Opportunities for First Graphene and Autosports
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between First and Autosports is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Autosports Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autosports Group 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 Autosports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autosports Group has no effect on the direction of First Graphene i.e., First Graphene and Autosports go up and down completely randomly.
Pair Corralation between First Graphene and Autosports
Assuming the 90 days trading horizon First Graphene is expected to under-perform the Autosports. In addition to that, First Graphene is 3.28 times more volatile than Autosports Group. It trades about -0.31 of its total potential returns per unit of risk. Autosports Group is currently generating about -0.6 per unit of volatility. If you would invest 216.00 in Autosports Group on September 5, 2024 and sell it today you would lose (35.00) from holding Autosports Group or give up 16.2% 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. Autosports Group
Performance |
| Timeline |
| First Graphene |
| Autosports Group |
First Graphene and Autosports Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Graphene and Autosports
The main advantage of trading using opposite First Graphene and Autosports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene position performs unexpectedly, Autosports 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 Autosports will offset losses from the drop in Autosports' long position.| First Graphene vs. Autosports Group | First Graphene vs. Falcon Metals | First Graphene vs. Homeco Daily Needs | First Graphene vs. Carawine Resources Limited |
| Autosports vs. Aneka Tambang Tbk | Autosports vs. BHP Group Limited | Autosports vs. Commonwealth Bank | Autosports vs. Commonwealth Bank of |
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 Stocks Directory module to find actively traded stocks across global markets.
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