Correlation Between Graphene Manufacturing and FuelPositive Corp

Can any of the company-specific risk be diversified away by investing in both Graphene Manufacturing and FuelPositive 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 FuelPositive 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 FuelPositive Corp, you can compare the effects of market volatilities on Graphene Manufacturing and FuelPositive 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 FuelPositive Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Manufacturing and FuelPositive Corp.

Diversification Opportunities for Graphene Manufacturing and FuelPositive Corp

0.59

Correlation Coefficient

Graphene Manufacturing  FuelPositive Corp

Very weak diversification

The 3 months correlation between Graphene and FuelPositive is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and FuelPositive Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FuelPositive 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 FuelPositive Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FuelPositive Corp has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and FuelPositive Corp go up and down completely randomly.

Pair Corralation between Graphene Manufacturing and FuelPositive Corp

Assuming the 90 days horizon Graphene Manufacturing Group is expected to generate 0.68 times more return on investment than FuelPositive Corp. However, Graphene Manufacturing Group is 1.46 times less risky than FuelPositive Corp. It trades about 0.14 of its potential returns per unit of risk. FuelPositive Corp is currently generating about 0.07 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 Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Graphene Manufacturing Group  vs.  FuelPositive Corp

Graphene Manufacturing

Risk-Adjusted Performance

Good

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

FuelPositive Corp

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in FuelPositive Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile technical indicators, FuelPositive Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Graphene Manufacturing and FuelPositive Corp

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

The idea behind Graphene Manufacturing Group and FuelPositive Corp 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.