Correlation Between Haydale Graphene and First Graphene
Can any of the company-specific risk be diversified away by investing in both Haydale Graphene and First 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 Haydale Graphene and First Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Haydale Graphene Industries and First Graphene, you can compare the effects of market volatilities on Haydale Graphene and First 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 Haydale Graphene with a short position of First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Haydale Graphene and First Graphene.
Diversification Opportunities for Haydale Graphene and First Graphene
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Haydale and First is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Haydale Graphene Industries and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene and Haydale Graphene 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 Haydale Graphene Industries are associated (or correlated) with First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of Haydale Graphene i.e., Haydale Graphene and First Graphene go up and down completely randomly.
Pair Corralation between Haydale Graphene and First Graphene
Assuming the 90 days horizon Haydale Graphene Industries is expected to generate 3.21 times more return on investment than First Graphene. However, Haydale Graphene is 3.21 times more volatile than First Graphene. It trades about 0.1 of its potential returns per unit of risk. First Graphene is currently generating about -0.03 per unit of risk. If you would invest 0.27 in Haydale Graphene Industries on August 29, 2024 and sell it today you would lose (0.05) from holding Haydale Graphene Industries or give up 18.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Haydale Graphene Industries vs. First Graphene
Performance |
| Timeline |
| Haydale Graphene Ind |
| First Graphene |
Haydale Graphene and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Haydale Graphene and First Graphene
The main advantage of trading using opposite Haydale Graphene and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Haydale Graphene position performs unexpectedly, First 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 First Graphene will offset losses from the drop in First Graphene's long position.| Haydale Graphene vs. Akzo Nobel NV | Haydale Graphene vs. Avoca LLC | Haydale Graphene vs. Arkema SA ADR | Haydale Graphene vs. HUMANA INC |
| First Graphene vs. Haydale Graphene Industries | First Graphene vs. Versarien plc | First Graphene vs. NanoXplore | First Graphene vs. G6 Materials Corp |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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