Correlation Between G6 Materials and First Graphene
Can any of the company-specific risk be diversified away by investing in both G6 Materials 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 G6 Materials and First Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between G6 Materials Corp and First Graphene, you can compare the effects of market volatilities on G6 Materials 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 G6 Materials with a short position of First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of G6 Materials and First Graphene.
Diversification Opportunities for G6 Materials and First Graphene
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GPHBF and First is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding G6 Materials Corp and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene and G6 Materials 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 G6 Materials Corp 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 G6 Materials i.e., G6 Materials and First Graphene go up and down completely randomly.
Pair Corralation between G6 Materials and First Graphene
Assuming the 90 days horizon G6 Materials Corp is expected to generate 2.14 times more return on investment than First Graphene. However, G6 Materials is 2.14 times more volatile than First Graphene. It trades about 0.34 of its potential returns per unit of risk. First Graphene is currently generating about 0.18 per unit of risk. If you would invest 3.20 in G6 Materials Corp on November 3, 2024 and sell it today you would earn a total of 25.80 from holding G6 Materials Corp or generate 806.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 97.56% |
| Values | Daily Returns |
G6 Materials Corp vs. First Graphene
Performance |
| Timeline |
| G6 Materials Corp |
| First Graphene |
G6 Materials and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G6 Materials and First Graphene
The main advantage of trading using opposite G6 Materials and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G6 Materials 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.| G6 Materials vs. Versarien plc | G6 Materials vs. Graphene Manufacturing Group | G6 Materials vs. 5E Advanced Materials | G6 Materials vs. Haydale Graphene Industries |
| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios |