Correlation Between Green Star and Haydale Graphene
Can any of the company-specific risk be diversified away by investing in both Green Star and Haydale 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 Green Star and Haydale Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Star Products and Haydale Graphene Industries, you can compare the effects of market volatilities on Green Star and Haydale 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 Green Star with a short position of Haydale Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Star and Haydale Graphene.
Diversification Opportunities for Green Star and Haydale Graphene
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Green and Haydale is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Green Star Products and Haydale Graphene Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haydale Graphene Ind and Green Star 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 Green Star Products are associated (or correlated) with Haydale Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haydale Graphene Ind has no effect on the direction of Green Star i.e., Green Star and Haydale Graphene go up and down completely randomly.
Pair Corralation between Green Star and Haydale Graphene
Given the investment horizon of 90 days Green Star is expected to generate 4.98 times less return on investment than Haydale Graphene. But when comparing it to its historical volatility, Green Star Products is 2.01 times less risky than Haydale Graphene. It trades about 0.08 of its potential returns per unit of risk. Haydale Graphene Industries is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 0.20 in Haydale Graphene Industries on August 30, 2024 and sell it today you would earn a total of 0.12 from holding Haydale Graphene Industries or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Star Products vs. Haydale Graphene Industries
Performance |
| Timeline |
| Green Star Products |
| Haydale Graphene Ind |
Green Star and Haydale Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Star and Haydale Graphene
The main advantage of trading using opposite Green Star and Haydale Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Star position performs unexpectedly, Haydale 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 Haydale Graphene will offset losses from the drop in Haydale Graphene's long position.| Green Star vs. Akzo Nobel NV | Green Star vs. Avoca LLC | Green Star vs. Arkema SA ADR | Green Star vs. HUMANA INC |
| Haydale Graphene vs. Akzo Nobel NV | Haydale Graphene vs. Avoca LLC | Haydale Graphene vs. Arkema SA ADR | Haydale Graphene vs. HUMANA INC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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