Correlation Between Graphene Solar and Trican Well

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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 Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy99.8%
ValuesDaily Returns

Graphene Solar Technologies  vs.  Trican Well Service

 Performance 
       Timeline  
Graphene Solar Techn 

Risk-Adjusted Performance

14 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Graphene Solar Technologies are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Graphene Solar showed solid returns over the last few months and may actually be approaching a breakup point.
Trican Well Service 

Risk-Adjusted Performance

0 of 100

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

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.
The idea behind Graphene Solar Technologies and Trican Well Service 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 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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