Correlation Between Graphene Manufacturing and American Manganese
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and American Manganese 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 Graphene Manufacturing and American Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphene Manufacturing Group and American Manganese, you can compare the effects of market volatilities on Graphene Manufacturing and American Manganese 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 Graphene Manufacturing with a short position of American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and American Manganese.
Diversification Opportunities for Graphene Manufacturing and American Manganese
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Graphene and American is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese and Graphene Manufacturing 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 Graphene Manufacturing Group are associated (or correlated) with American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and American Manganese go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and American Manganese
Assuming the 90 days horizon Graphene Manufacturing Group is expected to under-perform the American Manganese. But the stock apears to be less risky and, when comparing its historical volatility, Graphene Manufacturing Group is 1.34 times less risky than American Manganese. The stock trades about -0.04 of its potential returns per unit of risk. The American Manganese is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 36.00 in American Manganese on September 4, 2024 and sell it today you would lose (25.00) from holding American Manganese or give up 69.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. American Manganese
Performance |
| Timeline |
| Graphene Manufacturing |
| American Manganese |
Graphene Manufacturing and American Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and American Manganese
The main advantage of trading using opposite Graphene Manufacturing and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.| Graphene Manufacturing vs. Graphene Manufacturing Group | Graphene Manufacturing vs. ZEN Graphene Solutions | Graphene Manufacturing vs. NanoXplore | Graphene Manufacturing vs. Neo Battery Materials |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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