Correlation Between Gevo and Haydale Graphene

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

By analyzing existing cross correlation between Gevo Inc and Haydale Graphene Industries, you can compare the effects of market volatilities on Gevo and Haydale Graphene 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 Gevo with a short position of Haydale Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gevo and Haydale Graphene.

Diversification Opportunities for Gevo and Haydale Graphene

0.39

Correlation Coefficient

Gevo  Haydale Graphene

Weak diversification

The 3 months correlation between Gevo and Haydale is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gevo Inc and Haydale Graphene Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haydale Graphene Ind and Gevo 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 Gevo Inc are associated (or correlated) with Haydale Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haydale Graphene Ind has no effect on the direction of Gevo i.e., Gevo and Haydale Graphene go up and down completely randomly.

Pair Corralation between Gevo and Haydale Graphene

Given the investment horizon of 90 days Gevo Inc is expected to under-perform the Haydale Graphene. But the stock apears to be less risky and, when comparing its historical volatility, Gevo Inc is 2.12 times less risky than Haydale Graphene. The stock trades about -0.16 of its potential returns per unit of risk. The Haydale Graphene Industries is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  0.23  in Haydale Graphene Industries on December 28, 2024 and sell it today you would lose (0.06) from holding Haydale Graphene Industries or give up 26.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Gevo Inc  vs.  Haydale Graphene Industries

Gevo Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gevo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Haydale Graphene Ind

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Haydale Graphene Industries are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Haydale Graphene reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gevo and Haydale Graphene

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

The idea behind Gevo Inc and Haydale Graphene Industries 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.