Correlation Between Focus Graphite and Starr Peak
Can any of the company-specific risk be diversified away by investing in both Focus Graphite and Starr Peak 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 Starr Peak into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Focus Graphite and Starr Peak Exploration, you can compare the effects of market volatilities on Focus Graphite and Starr Peak 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 Starr Peak. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Graphite and Starr Peak.
Diversification Opportunities for Focus Graphite and Starr Peak
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Focus and Starr is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Starr Peak Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starr Peak Exploration 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 Starr Peak. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starr Peak Exploration has no effect on the direction of Focus Graphite i.e., Focus Graphite and Starr Peak go up and down completely randomly.
Pair Corralation between Focus Graphite and Starr Peak
Assuming the 90 days horizon Focus Graphite is expected to generate 2.24 times more return on investment than Starr Peak. However, Focus Graphite is 2.24 times more volatile than Starr Peak Exploration. It trades about 0.09 of its potential returns per unit of risk. Starr Peak Exploration is currently generating about -0.05 per unit of risk. If you would invest 5.00 in Focus Graphite on December 1, 2024 and sell it today you would earn a total of 1.49 from holding Focus Graphite or generate 29.8% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Focus Graphite vs. Starr Peak Exploration
Performance |
Timeline |
Focus Graphite |
Starr Peak Exploration |
Focus Graphite and Starr Peak Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Focus Graphite and Starr Peak
The main advantage of trading using opposite Focus Graphite and Starr Peak positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Graphite position performs unexpectedly, Starr Peak 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 Starr Peak will offset losses from the drop in Starr Peak's long position.Focus Graphite vs. Northern Graphite | Focus Graphite vs. Syrah Resources Limited | Focus Graphite vs. Altura Mining Limited | Focus Graphite vs. Vulcan Minerals |
Starr Peak vs. Ameriwest Lithium | Starr Peak vs. Global Helium Corp | Starr Peak vs. ZincX Resources Corp | Starr Peak vs. Strategic Resources |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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