Correlation Between Focus Graphite and Cantex Mine

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

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

Diversification Opportunities for Focus Graphite and Cantex Mine

-0.15

Correlation Coefficient

Focus Graphite  Cantex Mine

Good diversification

The 3 months correlation between Focus and Cantex is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Cantex Mine Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cantex Mine Development and Focus Graphite 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 Focus Graphite are associated (or correlated) with Cantex Mine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cantex Mine Development has no effect on the direction of Focus Graphite i.e., Focus Graphite and Cantex Mine go up and down completely randomly.

Pair Corralation between Focus Graphite and Cantex Mine

Assuming the 90 days horizon Focus Graphite is expected to generate 3.76 times less return on investment than Cantex Mine. But when comparing it to its historical volatility, Focus Graphite is 1.15 times less risky than Cantex Mine. It trades about 0.04 of its potential returns per unit of risk. Cantex Mine Development is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  7.23  in Cantex Mine Development on December 28, 2024 and sell it today you would earn a total of  6.77  from holding Cantex Mine Development or generate 93.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.77%
Values	Daily Returns

Focus Graphite  vs.  Cantex Mine Development

Focus Graphite

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Graphite are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Focus Graphite reported solid returns over the last few months and may actually be approaching a breakup point.

Cantex Mine Development

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Cantex Mine Development are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Cantex Mine reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Focus Graphite and Cantex Mine

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

The idea behind Focus Graphite and Cantex Mine Development 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.

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.