Correlation Between Graphex Group and Entree Resources

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

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

Diversification Opportunities for Graphex Group and Entree Resources

0.0

Correlation Coefficient

Graphex Group  Entree Resources

Pay attention - limited upside

The 3 months correlation between Graphex and Entree is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Graphex Group Limited and Entree Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entree Resources and Graphex Group 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 Graphex Group Limited are associated (or correlated) with Entree Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entree Resources has no effect on the direction of Graphex Group i.e., Graphex Group and Entree Resources go up and down completely randomly.

Pair Corralation between Graphex Group and Entree Resources

If you would invest  20.00  in Graphex Group Limited on November 28, 2024 and sell it today you would earn a total of  4.00  from holding Graphex Group Limited or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Graphex Group Limited  vs.  Entree Resources

Graphex Group Limited

Risk-Adjusted Performance

OK

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

Entree Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Entree Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Entree Resources is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Graphex Group and Entree Resources

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

The idea behind Graphex Group Limited and Entree Resources 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.