Correlation Between Applied Graphene and Perimeter Solutions

Can any of the company-specific risk be diversified away by investing in both Applied Graphene and Perimeter Solutions 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 Applied Graphene and Perimeter Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Applied Graphene Materials and Perimeter Solutions SA, you can compare the effects of market volatilities on Applied Graphene and Perimeter Solutions 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 Applied Graphene with a short position of Perimeter Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Graphene and Perimeter Solutions.

Diversification Opportunities for Applied Graphene and Perimeter Solutions

0.37

Correlation Coefficient

Applied Graphene  Perimeter Solutions

Weak diversification

The 3 months correlation between Applied and Perimeter is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and Perimeter Solutions SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Solutions and Applied 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 Applied Graphene Materials are associated (or correlated) with Perimeter Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Solutions has no effect on the direction of Applied Graphene i.e., Applied Graphene and Perimeter Solutions go up and down completely randomly.

Pair Corralation between Applied Graphene and Perimeter Solutions

If you would invest  1,168  in Perimeter Solutions SA on September 3, 2024 and sell it today you would earn a total of  112.00  from holding Perimeter Solutions SA or generate 9.59% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	62.5%
Values	Daily Returns

Applied Graphene Materials  vs.  Perimeter Solutions SA

Applied Graphene Mat

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Applied Graphene Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Applied Graphene is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Perimeter Solutions

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Perimeter Solutions SA are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Perimeter Solutions may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Applied Graphene and Perimeter Solutions

The main advantage of trading using opposite Applied Graphene and Perimeter Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Applied Graphene position performs unexpectedly, Perimeter Solutions 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 Perimeter Solutions will offset losses from the drop in Perimeter Solutions' long position.

The idea behind Applied Graphene Materials and Perimeter Solutions SA 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.

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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 Commodity Directory module to find actively traded commodities issued by global exchanges.