Correlation Between Mason Graphite and Focus Graphite
Can any of the company-specific risk be diversified away by investing in both Mason Graphite and Focus Graphite 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 Mason Graphite and Focus Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mason Graphite and Focus Graphite, you can compare the effects of market volatilities on Mason Graphite and Focus Graphite 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 Mason Graphite with a short position of Focus Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mason Graphite and Focus Graphite.
Diversification Opportunities for Mason Graphite and Focus Graphite
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Mason and Focus is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Mason Graphite and Focus Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Graphite and Mason Graphite 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 Mason Graphite are associated (or correlated) with Focus Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Graphite has no effect on the direction of Mason Graphite i.e., Mason Graphite and Focus Graphite go up and down completely randomly.
Pair Corralation between Mason Graphite and Focus Graphite
Assuming the 90 days horizon Mason Graphite is expected to under-perform the Focus Graphite. In addition to that, Mason Graphite is 1.54 times more volatile than Focus Graphite. It trades about -0.36 of its total potential returns per unit of risk. Focus Graphite is currently generating about -0.16 per unit of volatility. If you would invest 9.00 in Focus Graphite on August 29, 2024 and sell it today you would lose (1.50) from holding Focus Graphite or give up 16.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mason Graphite vs. Focus Graphite
Performance |
| Timeline |
| Mason Graphite |
| Focus Graphite |
Mason Graphite and Focus Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mason Graphite and Focus Graphite
The main advantage of trading using opposite Mason Graphite and Focus Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mason Graphite position performs unexpectedly, Focus Graphite 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 Focus Graphite will offset losses from the drop in Focus Graphite's long position.| Mason Graphite vs. Focus Graphite | Mason Graphite vs. Northern Graphite | Mason Graphite vs. Lomiko Metals | Mason Graphite vs. Nouveau Monde Graphite |
| Focus Graphite vs. Northern Graphite | Focus Graphite vs. Mason Graphite | Focus Graphite vs. Lomiko Metals | Focus Graphite 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |