Correlation Between Orica and Applied Graphene
Can any of the company-specific risk be diversified away by investing in both Orica and Applied 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 Orica and Applied Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orica Ltd ADR and Applied Graphene Materials, you can compare the effects of market volatilities on Orica and Applied 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 Orica with a short position of Applied Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orica and Applied Graphene.
Diversification Opportunities for Orica and Applied Graphene
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Orica and Applied is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Orica Ltd ADR and Applied Graphene Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Graphene Mat and Orica 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 Orica Ltd ADR are associated (or correlated) with Applied Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Graphene Mat has no effect on the direction of Orica i.e., Orica and Applied Graphene go up and down completely randomly.
Pair Corralation between Orica and Applied Graphene
Assuming the 90 days horizon Orica is expected to generate 197.28 times less return on investment than Applied Graphene. But when comparing it to its historical volatility, Orica Ltd ADR is 45.37 times less risky than Applied Graphene. It trades about 0.02 of its potential returns per unit of risk. Applied Graphene Materials is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 8.00 in Applied Graphene Materials on August 30, 2024 and sell it today you would lose (7.99) from holding Applied Graphene Materials or give up 99.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.05% |
| Values | Daily Returns |
Orica Ltd ADR vs. Applied Graphene Materials
Performance |
| Timeline |
| Orica Ltd ADR |
| Applied Graphene Mat |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Orica and Applied Graphene Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orica and Applied Graphene
The main advantage of trading using opposite Orica and Applied Graphene positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orica position performs unexpectedly, Applied 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 Applied Graphene will offset losses from the drop in Applied Graphene's long position.| Orica vs. Green Star Products | Orica vs. Greystone Logistics | Orica vs. Iofina plc | Orica vs. Crown Electrokinetics Corp |
| Applied Graphene vs. First Graphene | Applied Graphene vs. Haydale Graphene Industries | Applied Graphene vs. G6 Materials Corp | Applied Graphene vs. Versarien plc |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |