Correlation Between WELL Health and Graphite One
Can any of the company-specific risk be diversified away by investing in both WELL Health and Graphite One 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 WELL Health and Graphite One into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WELL Health Technologies and Graphite One, you can compare the effects of market volatilities on WELL Health and Graphite One 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 WELL Health with a short position of Graphite One. Check out your portfolio center. Please also check ongoing floating volatility patterns of WELL Health and Graphite One.
Diversification Opportunities for WELL Health and Graphite One
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between WELL and Graphite is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding WELL Health Technologies and Graphite One in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphite One and WELL Health 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 WELL Health Technologies are associated (or correlated) with Graphite One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphite One has no effect on the direction of WELL Health i.e., WELL Health and Graphite One go up and down completely randomly.
Pair Corralation between WELL Health and Graphite One
Assuming the 90 days trading horizon WELL Health Technologies is expected to generate 0.83 times more return on investment than Graphite One. However, WELL Health Technologies is 1.21 times less risky than Graphite One. It trades about 0.12 of its potential returns per unit of risk. Graphite One is currently generating about 0.0 per unit of risk. If you would invest 101.00 in WELL Health Technologies on October 20, 2024 and sell it today you would earn a total of 552.00 from holding WELL Health Technologies or generate 546.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WELL Health Technologies vs. Graphite One
Performance |
| Timeline |
| WELL Health Technologies |
| Graphite One |
WELL Health and Graphite One Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WELL Health and Graphite One
The main advantage of trading using opposite WELL Health and Graphite One positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WELL Health position performs unexpectedly, Graphite One 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 Graphite One will offset losses from the drop in Graphite One's long position.The idea behind WELL Health Technologies and Graphite One pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Graphite One vs. Northern Graphite | Graphite One vs. Mason Graphite | Graphite One vs. Focus Graphite | Graphite One vs. Canada Carbon |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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