Correlation Between Focus Graphite and Commerce Resources
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Commerce Resources 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 Focus Graphite and Commerce Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Commerce Resources Corp, you can compare the effects of market volatilities on Focus Graphite and Commerce Resources 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 Focus Graphite with a short position of Commerce Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Commerce Resources.
Diversification Opportunities for Focus Graphite and Commerce Resources
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Focus and Commerce is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Commerce Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commerce Resources Corp and Focus Graphite 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 Focus Graphite are associated (or correlated) with Commerce Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commerce Resources Corp has no effect on the direction of Focus Graphite i.e., Focus Graphite and Commerce Resources go up and down completely randomly.
Pair Corralation between Focus Graphite and Commerce Resources
Assuming the 90 days horizon Focus Graphite is expected to under-perform the Commerce Resources. But the stock apears to be less risky and, when comparing its historical volatility, Focus Graphite is 1.15 times less risky than Commerce Resources. The stock trades about -0.03 of its potential returns per unit of risk. The Commerce Resources Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Commerce Resources Corp on August 30, 2024 and sell it today you would lose (10.50) from holding Commerce Resources Corp or give up 58.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Graphite vs. Commerce Resources Corp
Performance |
| Timeline |
| Focus Graphite |
| Commerce Resources Corp |
Focus Graphite and Commerce Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Commerce Resources
The main advantage of trading using opposite Focus Graphite and Commerce Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Commerce Resources 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 Commerce Resources will offset losses from the drop in Commerce Resources' long position.| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Mason Graphite | Focus Graphite vs. Lomiko Metals | Focus Graphite vs. Graphite One |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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