Correlation Between Applied Graphene and Versarien Plc

Can any of the company-specific risk be diversified away by investing in both Applied Graphene and Versarien Plc 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 Versarien Plc 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 Versarien plc, you can compare the effects of market volatilities on Applied Graphene and Versarien Plc 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 Versarien Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Applied Graphene and Versarien Plc.

Diversification Opportunities for Applied Graphene and Versarien Plc

0.0

Correlation Coefficient

Applied Graphene  Versarien Plc

Pay attention - limited upside

The 3 months correlation between Applied and Versarien is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and Versarien plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Versarien plc 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 Versarien Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Versarien plc has no effect on the direction of Applied Graphene i.e., Applied Graphene and Versarien Plc go up and down completely randomly.

Pair Corralation between Applied Graphene and Versarien Plc

If you would invest  0.10  in Versarien plc on December 30, 2024 and sell it today you would lose (0.02) from holding Versarien plc or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Applied Graphene Materials  vs.  Versarien plc

Applied Graphene Mat

Risk-Adjusted Performance

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.

Versarien plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Versarien plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Versarien Plc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Applied Graphene and Versarien Plc

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

The idea behind Applied Graphene Materials and Versarien plc 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.