Correlation Between ZEN Graphene and Graphene Manufacturing
Can any of the company-specific risk be diversified away by investing in both ZEN Graphene and Graphene Manufacturing 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 Graphene Manufacturing 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 Graphene Manufacturing Group, you can compare the effects of market volatilities on ZEN Graphene and Graphene Manufacturing 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 Graphene Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZEN Graphene and Graphene Manufacturing.
Diversification Opportunities for ZEN Graphene and Graphene Manufacturing
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between ZEN and Graphene is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding ZEN Graphene Solutions and Graphene Manufacturing Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphene Manufacturing 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 Graphene Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphene Manufacturing has no effect on the direction of ZEN Graphene i.e., ZEN Graphene and Graphene Manufacturing go up and down completely randomly.
Pair Corralation between ZEN Graphene and Graphene Manufacturing
Assuming the 90 days horizon ZEN Graphene is expected to generate 1.84 times less return on investment than Graphene Manufacturing. But when comparing it to its historical volatility, ZEN Graphene Solutions is 1.04 times less risky than Graphene Manufacturing. It trades about 0.14 of its potential returns per unit of risk. Graphene Manufacturing Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 63.00 in Graphene Manufacturing Group on November 3, 2024 and sell it today you would earn a total of 20.00 from holding Graphene Manufacturing Group or generate 31.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZEN Graphene Solutions vs. Graphene Manufacturing Group
Performance |
| Timeline |
| ZEN Graphene Solutions |
| Graphene Manufacturing |
ZEN Graphene and Graphene Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZEN Graphene and Graphene Manufacturing
The main advantage of trading using opposite ZEN Graphene and Graphene Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZEN Graphene position performs unexpectedly, Graphene Manufacturing 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 Graphene Manufacturing will offset losses from the drop in Graphene Manufacturing's long position.| ZEN Graphene vs. American Manganese | ZEN Graphene vs. Frontier Lithium | ZEN Graphene vs. Graphene Manufacturing Group | ZEN Graphene vs. Northern Graphite |
| Graphene Manufacturing vs. Graphene Manufacturing Group | Graphene Manufacturing vs. ZEN Graphene Solutions | Graphene Manufacturing vs. NanoXplore | Graphene Manufacturing vs. Neo Battery Materials |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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