Correlation Between First Graphene and HAYDALE GRAPHINDUSLS-02

Can any of the company-specific risk be diversified away by investing in both First Graphene and HAYDALE GRAPHINDUSLS-02 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 First Graphene and HAYDALE GRAPHINDUSLS-02 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between First Graphene and HAYDALE GRAPHINDUSLS 02, you can compare the effects of market volatilities on First Graphene and HAYDALE GRAPHINDUSLS-02 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 First Graphene with a short position of HAYDALE GRAPHINDUSLS-02. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Graphene and HAYDALE GRAPHINDUSLS-02.

Diversification Opportunities for First Graphene and HAYDALE GRAPHINDUSLS-02

-0.24

Correlation Coefficient

First Graphene  HAYDALE GRAPHINDUSLS-02

Very good diversification

The 3 months correlation between First and HAYDALE is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and HAYDALE GRAPHINDUSLS 02 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HAYDALE GRAPHINDUSLS-02 and First Graphene 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 First Graphene are associated (or correlated) with HAYDALE GRAPHINDUSLS-02. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HAYDALE GRAPHINDUSLS-02 has no effect on the direction of First Graphene i.e., First Graphene and HAYDALE GRAPHINDUSLS-02 go up and down completely randomly.

Pair Corralation between First Graphene and HAYDALE GRAPHINDUSLS-02

Assuming the 90 days horizon First Graphene is expected to generate 29.48 times less return on investment than HAYDALE GRAPHINDUSLS-02. But when comparing it to its historical volatility, First Graphene is 17.88 times less risky than HAYDALE GRAPHINDUSLS-02. It trades about 0.15 of its potential returns per unit of risk. HAYDALE GRAPHINDUSLS 02 is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest  0.04  in HAYDALE GRAPHINDUSLS 02 on December 20, 2024 and sell it today you would earn a total of  0.24  from holding HAYDALE GRAPHINDUSLS 02 or generate 600.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

First Graphene  vs.  HAYDALE GRAPHINDUSLS 02

First Graphene

Risk-Adjusted Performance

Good

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

HAYDALE GRAPHINDUSLS-02

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HAYDALE GRAPHINDUSLS 02 are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HAYDALE GRAPHINDUSLS-02 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with First Graphene and HAYDALE GRAPHINDUSLS-02

The main advantage of trading using opposite First Graphene and HAYDALE GRAPHINDUSLS-02 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Graphene position performs unexpectedly, HAYDALE GRAPHINDUSLS-02 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 HAYDALE GRAPHINDUSLS-02 will offset losses from the drop in HAYDALE GRAPHINDUSLS-02's long position.

The idea behind First Graphene and HAYDALE GRAPHINDUSLS 02 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.