Correlation Between Focus Graphite and Silver Dollar

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

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

Diversification Opportunities for Focus Graphite and Silver Dollar

-0.22

Correlation Coefficient

Focus Graphite  Silver Dollar

Very good diversification

The 3 months correlation between Focus and Silver is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Silver Dollar Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Dollar Resources 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 Silver Dollar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Dollar Resources has no effect on the direction of Focus Graphite i.e., Focus Graphite and Silver Dollar go up and down completely randomly.

Pair Corralation between Focus Graphite and Silver Dollar

Assuming the 90 days horizon Focus Graphite is expected to generate 27.55 times less return on investment than Silver Dollar. In addition to that, Focus Graphite is 1.51 times more volatile than Silver Dollar Resources. It trades about 0.0 of its total potential returns per unit of risk. Silver Dollar Resources is currently generating about 0.03 per unit of volatility. If you would invest  21.00  in Silver Dollar Resources on September 12, 2024 and sell it today you would earn a total of  0.00  from holding Silver Dollar Resources or generate 0.0% return on investment over 90 days.

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

Focus Graphite  vs.  Silver Dollar Resources

Focus Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

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

Silver Dollar Resources

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Silver Dollar Resources are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Silver Dollar may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Focus Graphite and Silver Dollar

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

The idea behind Focus Graphite and Silver Dollar Resources 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 Anywhere module to track or share privately all of your investments from the convenience of any device.