Correlation Between ZEN Graphene and American Manganese
Can any of the company-specific risk be diversified away by investing in both ZEN Graphene and American Manganese 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 ZEN Graphene and American Manganese into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ZEN Graphene Solutions and American Manganese, you can compare the effects of market volatilities on ZEN Graphene and American Manganese 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 ZEN Graphene with a short position of American Manganese. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZEN Graphene and American Manganese.
Diversification Opportunities for ZEN Graphene and American Manganese
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ZEN and American is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding ZEN Graphene Solutions and American Manganese in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Manganese and ZEN Graphene 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 ZEN Graphene Solutions are associated (or correlated) with American Manganese. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Manganese has no effect on the direction of ZEN Graphene i.e., ZEN Graphene and American Manganese go up and down completely randomly.
Pair Corralation between ZEN Graphene and American Manganese
Assuming the 90 days horizon ZEN Graphene Solutions is expected to generate 0.95 times more return on investment than American Manganese. However, ZEN Graphene Solutions is 1.05 times less risky than American Manganese. It trades about 0.35 of its potential returns per unit of risk. American Manganese is currently generating about 0.28 per unit of risk. If you would invest 95.00 in ZEN Graphene Solutions on September 1, 2024 and sell it today you would earn a total of 70.00 from holding ZEN Graphene Solutions or generate 73.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
ZEN Graphene Solutions vs. American Manganese
Performance |
| Timeline |
| ZEN Graphene Solutions |
| American Manganese |
ZEN Graphene and American Manganese Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZEN Graphene and American Manganese
The main advantage of trading using opposite ZEN Graphene and American Manganese positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZEN Graphene position performs unexpectedly, American Manganese 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 American Manganese will offset losses from the drop in American Manganese's long position.| ZEN Graphene vs. American Manganese | ZEN Graphene vs. Frontier Lithium | ZEN Graphene vs. Graphene Manufacturing Group | ZEN Graphene vs. Northern Graphite |
| American Manganese vs. Manganese X Energy | American Manganese vs. Frontier Lithium | American Manganese vs. Talon Metals Corp | American Manganese vs. Azincourt Uranium |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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