Correlation Between Graphjet Technology and Westwater Resources
Can any of the company-specific risk be diversified away by investing in both Graphjet Technology and Westwater 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 Graphjet Technology and Westwater Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphjet Technology and Westwater Resources, you can compare the effects of market volatilities on Graphjet Technology and Westwater 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 Graphjet Technology with a short position of Westwater Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphjet Technology and Westwater Resources.
Diversification Opportunities for Graphjet Technology and Westwater Resources
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graphjet and Westwater is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater Resources 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 Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of Graphjet Technology i.e., Graphjet Technology and Westwater Resources go up and down completely randomly.
Pair Corralation between Graphjet Technology and Westwater Resources
Considering the 90-day investment horizon Graphjet Technology is expected to generate 2.78 times more return on investment than Westwater Resources. However, Graphjet Technology is 2.78 times more volatile than Westwater Resources. It trades about 0.14 of its potential returns per unit of risk. Westwater Resources is currently generating about -0.21 per unit of risk. If you would invest 232.00 in Graphjet Technology on August 28, 2024 and sell it today you would earn a total of 40.00 from holding Graphjet Technology or generate 17.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Graphjet Technology vs. Westwater Resources
Performance |
| Timeline |
| Graphjet Technology |
| Westwater Resources |
Graphjet Technology and Westwater Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Graphjet Technology and Westwater Resources
The main advantage of trading using opposite Graphjet Technology and Westwater Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphjet Technology position performs unexpectedly, Westwater 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 Westwater Resources will offset losses from the drop in Westwater Resources' long position.| Graphjet Technology vs. Ambev SA ADR | Graphjet Technology vs. Ziff Davis | Graphjet Technology vs. Westrock Coffee | Graphjet Technology vs. Cumberland Pharmaceuticals |
| Westwater Resources vs. Mason Graphite | Westwater Resources vs. Northern Graphite | Westwater Resources vs. Graphite One | Westwater Resources 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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