Correlation Between Graphene Manufacturing and AmmPower Corp
Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and AmmPower Corp 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 Graphene Manufacturing and AmmPower Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphene Manufacturing Group and AmmPower Corp, you can compare the effects of market volatilities on Graphene Manufacturing and AmmPower Corp 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 Graphene Manufacturing with a short position of AmmPower Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and AmmPower Corp.
Diversification Opportunities for Graphene Manufacturing and AmmPower Corp
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Graphene and AmmPower is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and AmmPower Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmmPower Corp and Graphene Manufacturing 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 Graphene Manufacturing Group are associated (or correlated) with AmmPower Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmmPower Corp has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and AmmPower Corp go up and down completely randomly.
Pair Corralation between Graphene Manufacturing and AmmPower Corp
Assuming the 90 days horizon Graphene Manufacturing Group is expected to generate 0.51 times more return on investment than AmmPower Corp. However, Graphene Manufacturing Group is 1.97 times less risky than AmmPower Corp. It trades about 0.14 of its potential returns per unit of risk. AmmPower Corp is currently generating about -0.01 per unit of risk. If you would invest 43.00 in Graphene Manufacturing Group on December 1, 2024 and sell it today you would earn a total of 22.00 from holding Graphene Manufacturing Group or generate 51.16% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Graphene Manufacturing Group vs. AmmPower Corp
Performance |
Timeline |
Graphene Manufacturing |
AmmPower Corp |
Graphene Manufacturing and AmmPower Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Graphene Manufacturing and AmmPower Corp
The main advantage of trading using opposite Graphene Manufacturing and AmmPower Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Manufacturing position performs unexpectedly, AmmPower Corp 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 AmmPower Corp will offset losses from the drop in AmmPower Corp's long position.Graphene Manufacturing vs. Iofina plc | Graphene Manufacturing vs. Nano One Materials | Graphene Manufacturing vs. Gevo Inc | Graphene Manufacturing vs. Haydale Graphene Industries |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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