Correlation Between Graphite One and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both Graphite One and Nouveau Monde 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 Nouveau Monde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphite One and Nouveau Monde Graphite, you can compare the effects of market volatilities on Graphite One and Nouveau Monde 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 Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphite One and Nouveau Monde.
Diversification Opportunities for Graphite One and Nouveau Monde
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Graphite and Nouveau is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Graphite One and Nouveau Monde Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Monde Graphite 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 Nouveau Monde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Monde Graphite has no effect on the direction of Graphite One i.e., Graphite One and Nouveau Monde go up and down completely randomly.
Pair Corralation between Graphite One and Nouveau Monde
Assuming the 90 days horizon Graphite One is expected to generate 1.04 times more return on investment than Nouveau Monde. However, Graphite One is 1.04 times more volatile than Nouveau Monde Graphite. It trades about 0.0 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.05 per unit of risk. If you would invest 84.00 in Graphite One on August 27, 2024 and sell it today you would lose (31.00) from holding Graphite One or give up 36.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphite One vs. Nouveau Monde Graphite
Performance |
| Timeline |
| Graphite One |
| Nouveau Monde Graphite |
Graphite One and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphite One and Nouveau Monde
The main advantage of trading using opposite Graphite One and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphite One position performs unexpectedly, Nouveau Monde 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 Nouveau Monde will offset losses from the drop in Nouveau Monde's long position.| Graphite One vs. Ascendant Resources | Graphite One vs. Cantex Mine Development | Graphite One vs. Amarc Resources | Graphite One vs. Sterling Metals Corp |
| Nouveau Monde vs. Mason Graphite | Nouveau Monde vs. Northern Graphite | Nouveau Monde vs. Graphite One | Nouveau Monde vs. Lomiko Metals |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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