Correlation Between Graphex Group and Québec Nickel

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

Diversification Opportunities for Graphex Group and Québec Nickel

0.2

Correlation Coefficient

Graphex Group  Québec Nickel

Modest diversification

The 3 months correlation between Graphex and Québec is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Graphex Group Limited and Qubec Nickel Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Qubec Nickel Corp 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 Québec Nickel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Qubec Nickel Corp has no effect on the direction of Graphex Group i.e., Graphex Group and Québec Nickel go up and down completely randomly.

Pair Corralation between Graphex Group and Québec Nickel

Given the investment horizon of 90 days Graphex Group Limited is expected to generate 0.73 times more return on investment than Québec Nickel. However, Graphex Group Limited is 1.36 times less risky than Québec Nickel. It trades about 0.03 of its potential returns per unit of risk. Qubec Nickel Corp is currently generating about -0.01 per unit of risk. If you would invest  22.00  in Graphex Group Limited on September 3, 2024 and sell it today you would lose (2.00) from holding Graphex Group Limited or give up 9.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Graphex Group Limited  vs.  Qubec Nickel Corp

Graphex Group Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Graphex Group Limited are ranked lower than 2 (%) 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.

Qubec Nickel Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Qubec Nickel Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Graphex Group and Québec Nickel

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

The idea behind Graphex Group Limited and Qubec Nickel 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.

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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.