Correlation Between Focus Graphite and CEMATRIX

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

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

Diversification Opportunities for Focus Graphite and CEMATRIX

0.06

Correlation Coefficient

Focus Graphite  CEMATRIX

Significant diversification

The 3 months correlation between Focus and CEMATRIX is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and CEMATRIX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEMATRIX 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 CEMATRIX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEMATRIX has no effect on the direction of Focus Graphite i.e., Focus Graphite and CEMATRIX go up and down completely randomly.

Pair Corralation between Focus Graphite and CEMATRIX

Assuming the 90 days horizon Focus Graphite is expected to under-perform the CEMATRIX. In addition to that, Focus Graphite is 2.72 times more volatile than CEMATRIX. It trades about -0.04 of its total potential returns per unit of risk. CEMATRIX is currently generating about 0.02 per unit of volatility. If you would invest  18.00  in CEMATRIX on October 5, 2024 and sell it today you would earn a total of  0.00  from holding CEMATRIX or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Focus Graphite  vs.  CEMATRIX

Focus Graphite

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Graphite are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Focus Graphite may actually be approaching a critical reversion point that can send shares even higher in February 2025.

CEMATRIX

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Focus Graphite and CEMATRIX

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

The idea behind Focus Graphite and CEMATRIX 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.