Correlation Between Graphene Manufacturing and Neo Battery
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and Neo Battery 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 Neo Battery 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 Neo Battery Materials, you can compare the effects of market volatilities on Graphene Manufacturing and Neo Battery 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 Neo Battery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and Neo Battery.
Diversification Opportunities for Graphene Manufacturing and Neo Battery
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Graphene and Neo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and Neo Battery Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neo Battery Materials 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 Neo Battery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neo Battery Materials has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and Neo Battery go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and Neo Battery
Assuming the 90 days horizon Graphene Manufacturing Group is expected to under-perform the Neo Battery. But the otc stock apears to be less risky and, when comparing its historical volatility, Graphene Manufacturing Group is 1.71 times less risky than Neo Battery. The otc stock trades about -0.06 of its potential returns per unit of risk. The Neo Battery Materials is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 46.00 in Neo Battery Materials on September 2, 2024 and sell it today you would earn a total of 42.00 from holding Neo Battery Materials or generate 91.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. Neo Battery Materials
Performance |
| Timeline |
| Graphene Manufacturing |
| Neo Battery Materials |
Graphene Manufacturing and Neo Battery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and Neo Battery
The main advantage of trading using opposite Graphene Manufacturing and Neo Battery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, Neo Battery 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 Neo Battery will offset losses from the drop in Neo Battery's long position.| Graphene Manufacturing vs. Iofina plc | Graphene Manufacturing vs. Nano One Materials | Graphene Manufacturing vs. Gevo Inc | Graphene Manufacturing vs. Haydale Graphene Industries |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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