Correlation Between NanoXplore and First Graphene
Can any of the company-specific risk be diversified away by investing in both NanoXplore 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 NanoXplore and First Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NanoXplore and First Graphene, you can compare the effects of market volatilities on NanoXplore 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 NanoXplore with a short position of First Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of NanoXplore and First Graphene.
Diversification Opportunities for NanoXplore and First Graphene
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between NanoXplore and First is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding NanoXplore and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene and NanoXplore 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 NanoXplore 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 NanoXplore i.e., NanoXplore and First Graphene go up and down completely randomly.
Pair Corralation between NanoXplore and First Graphene
Assuming the 90 days horizon NanoXplore is expected to generate 0.22 times more return on investment than First Graphene. However, NanoXplore is 4.63 times less risky than First Graphene. It trades about -0.37 of its potential returns per unit of risk. First Graphene is currently generating about -0.14 per unit of risk. If you would invest 192.00 in NanoXplore on August 25, 2024 and sell it today you would lose (31.00) from holding NanoXplore or give up 16.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NanoXplore vs. First Graphene
Performance |
| Timeline |
| NanoXplore |
| First Graphene |
NanoXplore and First Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NanoXplore and First Graphene
The main advantage of trading using opposite NanoXplore and First Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NanoXplore 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.| NanoXplore vs. Altech Batteries Limited | NanoXplore vs. Asahi Kaisei Corp | NanoXplore vs. ASP Isotopes Common | NanoXplore vs. First Graphene |
| 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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