Correlation Between Graphjet Technology and Starbucks
Can any of the company-specific risk be diversified away by investing in both Graphjet Technology and Starbucks 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 Graphjet Technology and Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphjet Technology and Starbucks, you can compare the effects of market volatilities on Graphjet Technology and Starbucks 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 Graphjet Technology with a short position of Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphjet Technology and Starbucks.
Diversification Opportunities for Graphjet Technology and Starbucks
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Graphjet and Starbucks is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks and Graphjet Technology 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 Graphjet Technology are associated (or correlated) with Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of Graphjet Technology i.e., Graphjet Technology and Starbucks go up and down completely randomly.
Pair Corralation between Graphjet Technology and Starbucks
Considering the 90-day investment horizon Graphjet Technology is expected to generate 7.61 times more return on investment than Starbucks. However, Graphjet Technology is 7.61 times more volatile than Starbucks. It trades about 0.22 of its potential returns per unit of risk. Starbucks is currently generating about 0.16 per unit of risk. If you would invest 219.00 in Graphjet Technology on September 5, 2024 and sell it today you would earn a total of 105.00 from holding Graphjet Technology or generate 47.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphjet Technology vs. Starbucks
Performance |
| Timeline |
| Graphjet Technology |
| Starbucks |
Graphjet Technology and Starbucks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphjet Technology and Starbucks
The main advantage of trading using opposite Graphjet Technology and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphjet Technology position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.| Graphjet Technology vs. Starbucks | Graphjet Technology vs. Yum Brands | Graphjet Technology vs. Sun Country Airlines | Graphjet Technology vs. Apogee Enterprises |
| Starbucks vs. Hyatt Hotels | Starbucks vs. Smart Share Global | Starbucks vs. Wyndham Hotels Resorts | Starbucks vs. WW International |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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