Correlation Between Graphite One and Nexa Resources
Can any of the company-specific risk be diversified away by investing in both Graphite One and Nexa Resources 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 Graphite One and Nexa Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphite One and Nexa Resources SA, you can compare the effects of market volatilities on Graphite One and Nexa Resources 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 Graphite One with a short position of Nexa Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphite One and Nexa Resources.
Diversification Opportunities for Graphite One and Nexa Resources
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Graphite and Nexa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Graphite One and Nexa Resources SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexa Resources SA and Graphite One 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 Graphite One are associated (or correlated) with Nexa Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexa Resources SA has no effect on the direction of Graphite One i.e., Graphite One and Nexa Resources go up and down completely randomly.
Pair Corralation between Graphite One and Nexa Resources
Assuming the 90 days horizon Graphite One is expected to under-perform the Nexa Resources. In addition to that, Graphite One is 1.88 times more volatile than Nexa Resources SA. It trades about -0.02 of its total potential returns per unit of risk. Nexa Resources SA is currently generating about 0.06 per unit of volatility. If you would invest 531.00 in Nexa Resources SA on August 31, 2024 and sell it today you would earn a total of 231.00 from holding Nexa Resources SA or generate 43.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Graphite One vs. Nexa Resources SA
Performance |
| Timeline |
| Graphite One |
| Nexa Resources SA |
Graphite One and Nexa Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphite One and Nexa Resources
The main advantage of trading using opposite Graphite One and Nexa Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphite One position performs unexpectedly, Nexa Resources 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 Nexa Resources will offset losses from the drop in Nexa Resources' long position.| Graphite One vs. Mason Graphite | Graphite One vs. Northern Graphite | Graphite One vs. Lomiko Metals | Graphite One vs. IGO Limited |
| Nexa Resources vs. Materion | Nexa Resources vs. Fury Gold Mines | Nexa Resources vs. Eskay Mining Corp | Nexa Resources vs. EMX Royalty 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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