Correlation Between Great Atlantic and Focus Graphite

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

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

Diversification Opportunities for Great Atlantic and Focus Graphite

-0.39

Correlation Coefficient

Great Atlantic  Focus Graphite

Very good diversification

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

Pair Corralation between Great Atlantic and Focus Graphite

Given the investment horizon of 90 days Great Atlantic is expected to generate 1.56 times less return on investment than Focus Graphite. In addition to that, Great Atlantic is 1.82 times more volatile than Focus Graphite. It trades about 0.01 of its total potential returns per unit of risk. Focus Graphite is currently generating about 0.02 per unit of volatility. If you would invest  9.00  in Focus Graphite on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Focus Graphite or generate 0.0% return on investment over 90 days.

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

Great Atlantic Resources  vs.  Focus Graphite

Great Atlantic Resources

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Great Atlantic Resources are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Great Atlantic showed solid returns over the last few months and may actually be approaching a breakup point.

Focus Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Focus Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Great Atlantic and Focus Graphite

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

The idea behind Great Atlantic Resources and Focus Graphite 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.