Correlation Between Graphene Solar and Trican Well
Can any of the company-specific risk be diversified away by investing in both Graphene Solar and Trican Well 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 Solar and Trican Well into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphene Solar Technologies and Trican Well Service, you can compare the effects of market volatilities on Graphene Solar and Trican Well 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 Solar with a short position of Trican Well. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphene Solar and Trican Well.
Diversification Opportunities for Graphene Solar and Trican Well
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Graphene and Trican is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Solar Technologies and Trican Well Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trican Well Service and Graphene Solar 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 Solar Technologies are associated (or correlated) with Trican Well. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trican Well Service has no effect on the direction of Graphene Solar i.e., Graphene Solar and Trican Well go up and down completely randomly.
Pair Corralation between Graphene Solar and Trican Well
Given the investment horizon of 90 days Graphene Solar Technologies is expected to generate 37.18 times more return on investment than Trican Well. However, Graphene Solar is 37.18 times more volatile than Trican Well Service. It trades about 0.11 of its potential returns per unit of risk. Trican Well Service is currently generating about 0.04 per unit of risk. If you would invest 13.00 in Graphene Solar Technologies on September 6, 2024 and sell it today you would lose (12.00) from holding Graphene Solar Technologies or give up 92.31% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.8% |
Values | Daily Returns |
Graphene Solar Technologies vs. Trican Well Service
Performance |
Timeline |
Graphene Solar Techn |
Trican Well Service |
Graphene Solar and Trican Well Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Graphene Solar and Trican Well
The main advantage of trading using opposite Graphene Solar and Trican Well positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphene Solar position performs unexpectedly, Trican Well 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 Trican Well will offset losses from the drop in Trican Well's long position.Graphene Solar vs. Photronics | Graphene Solar vs. Axcelis Technologies | Graphene Solar vs. Aehr Test Systems | Graphene Solar vs. Teradyne |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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