Correlation Between Graphene Manufacturing and First Graphene
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and First Graphene 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 First Graphene 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 First Graphene, you can compare the effects of market volatilities on Graphene Manufacturing and First Graphene 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 First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and First Graphene.
Diversification Opportunities for Graphene Manufacturing and First Graphene
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Graphene and First is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene 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 First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and First Graphene go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and First Graphene
Assuming the 90 days horizon Graphene Manufacturing Group is expected to generate 0.53 times more return on investment than First Graphene. However, Graphene Manufacturing Group is 1.88 times less risky than First Graphene. It trades about -0.06 of its potential returns per unit of risk. First Graphene is currently generating about -0.1 per unit of risk. If you would invest 46.00 in Graphene Manufacturing Group on August 26, 2024 and sell it today you would lose (4.00) from holding Graphene Manufacturing Group or give up 8.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. First Graphene
Performance |
| Timeline |
| Graphene Manufacturing |
| First Graphene |
Graphene Manufacturing and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and First Graphene
The main advantage of trading using opposite Graphene Manufacturing and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, First Graphene 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 First Graphene will offset losses from the drop in First Graphene's long position.| Graphene Manufacturing vs. First Graphene | Graphene Manufacturing vs. HUMANA INC | Graphene Manufacturing vs. Aquagold International | Graphene Manufacturing vs. Barloworld Ltd ADR |
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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