Correlation Between G6 Materials and NanoXplore
Can any of the company-specific risk be diversified away by investing in both G6 Materials and NanoXplore 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 NanoXplore 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 NanoXplore, you can compare the effects of market volatilities on G6 Materials and NanoXplore 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 NanoXplore. Check out your portfolio center. Please also check ongoing floating volatility patterns of G6 Materials and NanoXplore.
Diversification Opportunities for G6 Materials and NanoXplore
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between GPHBF and NanoXplore is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding G6 Materials Corp and NanoXplore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NanoXplore 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 NanoXplore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NanoXplore has no effect on the direction of G6 Materials i.e., G6 Materials and NanoXplore go up and down completely randomly.
Pair Corralation between G6 Materials and NanoXplore
Assuming the 90 days horizon G6 Materials Corp is expected to generate 4.91 times more return on investment than NanoXplore. However, G6 Materials is 4.91 times more volatile than NanoXplore. It trades about 0.01 of its potential returns per unit of risk. NanoXplore is currently generating about -0.17 per unit of risk. If you would invest 3.25 in G6 Materials Corp on September 12, 2024 and sell it today you would lose (0.42) from holding G6 Materials Corp or give up 12.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
G6 Materials Corp vs. NanoXplore
Performance |
| Timeline |
| G6 Materials Corp |
| NanoXplore |
G6 Materials and NanoXplore Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with G6 Materials and NanoXplore
The main advantage of trading using opposite G6 Materials and NanoXplore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if G6 Materials position performs unexpectedly, NanoXplore 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 NanoXplore will offset losses from the drop in NanoXplore'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 |
| NanoXplore vs. Altech Batteries Limited | NanoXplore vs. Asahi Kaisei Corp | NanoXplore vs. ASP Isotopes Common | NanoXplore vs. First Graphene |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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