Correlation Between Graphene Manufacturing and Gevo
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and Gevo 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 Gevo 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 Gevo Inc, you can compare the effects of market volatilities on Graphene Manufacturing and Gevo 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 Gevo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and Gevo.
Diversification Opportunities for Graphene Manufacturing and Gevo
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Graphene and Gevo is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and Gevo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gevo Inc 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 Gevo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gevo Inc has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and Gevo go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and Gevo
Assuming the 90 days horizon Graphene Manufacturing Group is expected to under-perform the Gevo. But the otc stock apears to be less risky and, when comparing its historical volatility, Graphene Manufacturing Group is 1.18 times less risky than Gevo. The otc stock trades about -0.03 of its potential returns per unit of risk. The Gevo Inc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 123.00 in Gevo Inc on August 30, 2024 and sell it today you would earn a total of 37.00 from holding Gevo Inc or generate 30.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. Gevo Inc
Performance |
| Timeline |
| Graphene Manufacturing |
| Gevo Inc |
Graphene Manufacturing and Gevo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and Gevo
The main advantage of trading using opposite Graphene Manufacturing and Gevo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, Gevo 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 Gevo will offset losses from the drop in Gevo's long position.| Graphene Manufacturing vs. Akzo Nobel NV | Graphene Manufacturing vs. Avoca LLC | Graphene Manufacturing vs. Arkema SA ADR | Graphene Manufacturing vs. HUMANA INC |
| Gevo vs. REX American Resources | Gevo vs. Axalta Coating Systems | Gevo vs. Avantor | Gevo vs. FutureFuel Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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