Correlation Between Graphene Manufacturing and Novozymes
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and Novozymes 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 Novozymes 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 Novozymes AS, you can compare the effects of market volatilities on Graphene Manufacturing and Novozymes 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 Novozymes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and Novozymes.
Diversification Opportunities for Graphene Manufacturing and Novozymes
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Graphene and Novozymes is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and Novozymes AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novozymes AS 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 Novozymes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novozymes AS has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and Novozymes go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and Novozymes
Assuming the 90 days horizon Graphene Manufacturing Group is expected to under-perform the Novozymes. In addition to that, Graphene Manufacturing is 2.9 times more volatile than Novozymes AS. It trades about -0.04 of its total potential returns per unit of risk. Novozymes AS is currently generating about 0.01 per unit of volatility. If you would invest 5,660 in Novozymes AS on August 24, 2024 and sell it today you would earn a total of 66.00 from holding Novozymes AS or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphene Manufacturing Group vs. Novozymes AS
Performance |
| Timeline |
| Graphene Manufacturing |
| Novozymes AS |
Graphene Manufacturing and Novozymes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphene Manufacturing and Novozymes
The main advantage of trading using opposite Graphene Manufacturing and Novozymes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, Novozymes 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 Novozymes will offset losses from the drop in Novozymes' long position.| Graphene Manufacturing vs. Iofina plc | Graphene Manufacturing vs. Nano One Materials | Graphene Manufacturing vs. Gevo Inc | Graphene Manufacturing vs. Haydale Graphene Industries |
| Novozymes vs. Air Liquide SA | Novozymes vs. PPG Industries | Novozymes vs. Sherwin Williams Co | Novozymes vs. Air Products and |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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