Correlation Between Mason Graphite and Nouveau Monde
Can any of the company-specific risk be diversified away by investing in both Mason Graphite and Nouveau Monde 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 Nouveau Monde into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mason Graphite and Nouveau Monde Graphite, you can compare the effects of market volatilities on Mason Graphite and Nouveau Monde 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 Nouveau Monde. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mason Graphite and Nouveau Monde.
Diversification Opportunities for Mason Graphite and Nouveau Monde
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mason and Nouveau is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Mason Graphite and Nouveau Monde Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nouveau Monde 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 Nouveau Monde. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nouveau Monde Graphite has no effect on the direction of Mason Graphite i.e., Mason Graphite and Nouveau Monde go up and down completely randomly.
Pair Corralation between Mason Graphite and Nouveau Monde
Assuming the 90 days horizon Mason Graphite is expected to generate 1.57 times more return on investment than Nouveau Monde. However, Mason Graphite is 1.57 times more volatile than Nouveau Monde Graphite. It trades about -0.01 of its potential returns per unit of risk. Nouveau Monde Graphite is currently generating about -0.05 per unit of risk. If you would invest 15.00 in Mason Graphite on August 27, 2024 and sell it today you would lose (10.65) from holding Mason Graphite or give up 71.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mason Graphite vs. Nouveau Monde Graphite
Performance |
| Timeline |
| Mason Graphite |
| Nouveau Monde Graphite |
Mason Graphite and Nouveau Monde Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mason Graphite and Nouveau Monde
The main advantage of trading using opposite Mason Graphite and Nouveau Monde positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mason Graphite position performs unexpectedly, Nouveau Monde 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 Nouveau Monde will offset losses from the drop in Nouveau Monde's long position.| Mason Graphite vs. Northern Graphite | Mason Graphite vs. Graphite One | Mason Graphite vs. Lomiko Metals | Mason Graphite vs. IGO Limited |
| Nouveau Monde vs. Mason Graphite | Nouveau Monde vs. Northern Graphite | Nouveau Monde vs. Graphite One | Nouveau Monde 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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