Correlation Between Graphite One and Fidelity Minerals

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

By analyzing existing cross correlation between Graphite One and Fidelity Minerals Corp, you can compare the effects of market volatilities on Graphite One and Fidelity Minerals 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 Graphite One with a short position of Fidelity Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphite One and Fidelity Minerals.

Diversification Opportunities for Graphite One and Fidelity Minerals

0.58

Correlation Coefficient

Graphite One  Fidelity Minerals

Very weak diversification

The 3 months correlation between Graphite and Fidelity is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Graphite One and Fidelity Minerals Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Minerals Corp and Graphite One 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 Graphite One are associated (or correlated) with Fidelity Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Minerals Corp has no effect on the direction of Graphite One i.e., Graphite One and Fidelity Minerals go up and down completely randomly.

Pair Corralation between Graphite One and Fidelity Minerals

Assuming the 90 days horizon Graphite One is expected to generate 143.26 times less return on investment than Fidelity Minerals. But when comparing it to its historical volatility, Graphite One is 4.19 times less risky than Fidelity Minerals. It trades about 0.0 of its potential returns per unit of risk. Fidelity Minerals Corp is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  3.00  in Fidelity Minerals Corp on September 29, 2024 and sell it today you would earn a total of  1.50  from holding Fidelity Minerals Corp or generate 50.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Graphite One  vs.  Fidelity Minerals Corp

Graphite One

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graphite One has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Graphite One is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Fidelity Minerals Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fidelity Minerals Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fidelity Minerals showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Graphite One and Fidelity Minerals

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

The idea behind Graphite One and Fidelity Minerals 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.