Correlation Between First Graphene and Energy

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

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

Diversification Opportunities for First Graphene and Energy

-0.63

Correlation Coefficient

First Graphene  Energy

Excellent diversification

The 3 months correlation between First and Energy is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding First Graphene and Energy and Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Energy and Environmental 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 Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Energy and Environmental has no effect on the direction of First Graphene i.e., First Graphene and Energy go up and down completely randomly.

Pair Corralation between First Graphene and Energy

Assuming the 90 days horizon First Graphene is expected to generate 3.43 times more return on investment than Energy. However, First Graphene is 3.43 times more volatile than Energy and Environmental. It trades about 0.18 of its potential returns per unit of risk. Energy and Environmental is currently generating about 0.02 per unit of risk. If you would invest  2.10  in First Graphene on December 2, 2024 and sell it today you would earn a total of  1.59  from holding First Graphene or generate 75.71% return on investment over 90 days.

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

First Graphene  vs.  Energy and Environmental

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.

Energy and Environmental

Risk-Adjusted Performance

Very Weak

Over the last 90 days Energy and Environmental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with First Graphene and Energy

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

The idea behind First Graphene and Energy and Environmental 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.