Correlation Between Focus Graphite and Great Atlantic
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Great Atlantic 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 Great Atlantic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Great Atlantic Resources, you can compare the effects of market volatilities on Focus Graphite and Great Atlantic 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 Great Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Great Atlantic.
Diversification Opportunities for Focus Graphite and Great Atlantic
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Focus and Great is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Great Atlantic Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Atlantic Resources 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 Great Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Atlantic Resources has no effect on the direction of Focus Graphite i.e., Focus Graphite and Great Atlantic go up and down completely randomly.
Pair Corralation between Focus Graphite and Great Atlantic
Assuming the 90 days horizon Focus Graphite is expected to under-perform the Great Atlantic. But the stock apears to be less risky and, when comparing its historical volatility, Focus Graphite is 1.81 times less risky than Great Atlantic. The stock trades about -0.03 of its potential returns per unit of risk. The Great Atlantic Resources is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 5.00 in Great Atlantic Resources on August 30, 2024 and sell it today you would earn a total of 1.00 from holding Great Atlantic Resources or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Graphite vs. Great Atlantic Resources
Performance |
| Timeline |
| Focus Graphite |
| Great Atlantic Resources |
Focus Graphite and Great Atlantic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Graphite and Great Atlantic
The main advantage of trading using opposite Focus Graphite and Great Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Great Atlantic 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 Great Atlantic will offset losses from the drop in Great Atlantic's long position.| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Mason Graphite | Focus Graphite vs. Lomiko Metals | Focus Graphite vs. Graphite One |
| Great Atlantic vs. Gossan Resources | Great Atlantic vs. Golden Ridge Resources | Great Atlantic vs. Jaxon Mining | Great Atlantic vs. Highway 50 Gold |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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