Correlation Between Nouveau Monde and Focus Graphite
Can any of the company-specific risk be diversified away by investing in both Nouveau Monde 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 Nouveau Monde and Focus Graphite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nouveau Monde Graphite and Focus Graphite, you can compare the effects of market volatilities on Nouveau Monde 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 Nouveau Monde with a short position of Focus Graphite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nouveau Monde and Focus Graphite.
Diversification Opportunities for Nouveau Monde and Focus Graphite
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nouveau and Focus is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nouveau Monde Graphite and Focus Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Graphite and Nouveau Monde 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 Nouveau Monde 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 Nouveau Monde i.e., Nouveau Monde and Focus Graphite go up and down completely randomly.
Pair Corralation between Nouveau Monde and Focus Graphite
Assuming the 90 days horizon Nouveau Monde Graphite is expected to under-perform the Focus Graphite. But the stock apears to be less risky and, when comparing its historical volatility, Nouveau Monde Graphite is 1.78 times less risky than Focus Graphite. The stock trades about -0.13 of its potential returns per unit of risk. The Focus Graphite is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Focus Graphite on August 29, 2024 and sell it today you would lose (5.50) from holding Focus Graphite or give up 42.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nouveau Monde Graphite vs. Focus Graphite
Performance |
| Timeline |
| Nouveau Monde Graphite |
| Focus Graphite |
Nouveau Monde and Focus Graphite Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nouveau Monde and Focus Graphite
The main advantage of trading using opposite Nouveau Monde and Focus Graphite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nouveau Monde 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.| Nouveau Monde vs. Mason Graphite | Nouveau Monde vs. Gratomic | Nouveau Monde vs. HPQ Silicon Resources | Nouveau Monde vs. Focus 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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