Correlation Between Neo Battery and Graphene Manufacturing
Can any of the company-specific risk be diversified away by investing in both Neo Battery and Graphene Manufacturing 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 Neo Battery and Graphene Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neo Battery Materials and Graphene Manufacturing Group, you can compare the effects of market volatilities on Neo Battery and Graphene Manufacturing 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 Neo Battery with a short position of Graphene Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neo Battery and Graphene Manufacturing.
Diversification Opportunities for Neo Battery and Graphene Manufacturing
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Neo and Graphene is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Neo Battery Materials and Graphene Manufacturing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphene Manufacturing and Neo Battery 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 Neo Battery Materials are associated (or correlated) with Graphene Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphene Manufacturing has no effect on the direction of Neo Battery i.e., Neo Battery and Graphene Manufacturing go up and down completely randomly.
Pair Corralation between Neo Battery and Graphene Manufacturing
Assuming the 90 days horizon Neo Battery Materials is expected to generate 1.48 times more return on investment than Graphene Manufacturing. However, Neo Battery is 1.48 times more volatile than Graphene Manufacturing Group. It trades about 0.07 of its potential returns per unit of risk. Graphene Manufacturing Group is currently generating about -0.06 per unit of risk. If you would invest 36.00 in Neo Battery Materials on August 31, 2024 and sell it today you would earn a total of 52.00 from holding Neo Battery Materials or generate 144.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neo Battery Materials vs. Graphene Manufacturing Group
Performance |
| Timeline |
| Neo Battery Materials |
| Graphene Manufacturing |
Neo Battery and Graphene Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neo Battery and Graphene Manufacturing
The main advantage of trading using opposite Neo Battery and Graphene Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neo Battery position performs unexpectedly, Graphene Manufacturing 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 Graphene Manufacturing will offset losses from the drop in Graphene Manufacturing's long position.| Neo Battery vs. Solar Alliance Energy | Neo Battery vs. Global X Active | Neo Battery vs. Financial 15 Split | Neo Battery vs. Rubicon Organics |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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