Correlation Between Graphite One and NextSource Materials
Can any of the company-specific risk be diversified away by investing in both Graphite One and NextSource Materials 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 NextSource Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphite One and NextSource Materials, you can compare the effects of market volatilities on Graphite One and NextSource Materials 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 NextSource Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphite One and NextSource Materials.
Diversification Opportunities for Graphite One and NextSource Materials
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graphite and NextSource is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Graphite One and NextSource Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NextSource Materials 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 NextSource Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NextSource Materials has no effect on the direction of Graphite One i.e., Graphite One and NextSource Materials go up and down completely randomly.
Pair Corralation between Graphite One and NextSource Materials
Assuming the 90 days horizon Graphite One is expected to generate 0.77 times more return on investment than NextSource Materials. However, Graphite One is 1.29 times less risky than NextSource Materials. It trades about 0.41 of its potential returns per unit of risk. NextSource Materials is currently generating about 0.15 per unit of risk. If you would invest 46.00 in Graphite One on November 2, 2024 and sell it today you would earn a total of 19.00 from holding Graphite One or generate 41.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Graphite One vs. NextSource Materials
Performance |
| Timeline |
| Graphite One |
| NextSource Materials |
Graphite One and NextSource Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphite One and NextSource Materials
The main advantage of trading using opposite Graphite One and NextSource Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphite One position performs unexpectedly, NextSource Materials 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 NextSource Materials will offset losses from the drop in NextSource Materials' long position.| Graphite One vs. Mason Graphite | Graphite One vs. Northern Graphite | Graphite One vs. Lomiko Metals | Graphite One vs. IGO Limited |
| NextSource Materials vs. Leading Edge Materials | NextSource Materials vs. Syrah Resources Limited | NextSource Materials vs. Mason Graphite | NextSource Materials vs. Graphite One |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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