Correlation Between Gratomic and Jervois Mining

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

By analyzing existing cross correlation between Gratomic and Jervois Mining, you can compare the effects of market volatilities on Gratomic and Jervois Mining 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 Gratomic with a short position of Jervois Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gratomic and Jervois Mining.

Diversification Opportunities for Gratomic and Jervois Mining

-0.24

Correlation Coefficient

Gratomic  Jervois Mining

Very good diversification

The 3 months correlation between Gratomic and Jervois is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gratomic and Jervois Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jervois Mining and Gratomic 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 Gratomic are associated (or correlated) with Jervois Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jervois Mining has no effect on the direction of Gratomic i.e., Gratomic and Jervois Mining go up and down completely randomly.

Pair Corralation between Gratomic and Jervois Mining

Assuming the 90 days horizon Gratomic is expected to under-perform the Jervois Mining. But the pink sheet apears to be less risky and, when comparing its historical volatility, Gratomic is 1.29 times less risky than Jervois Mining. The pink sheet trades about -0.02 of its potential returns per unit of risk. The Jervois Mining is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  0.80  in Jervois Mining on September 4, 2024 and sell it today you would earn a total of  0.02  from holding Jervois Mining or generate 2.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gratomic  vs.  Jervois Mining

Gratomic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gratomic has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Jervois Mining

Risk-Adjusted Performance

4 of 100

Insignificant

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

Pair Trading with Gratomic and Jervois Mining

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

The idea behind Gratomic and Jervois Mining 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.