Correlation Between Graphjet Technology and BioForce Nanosciences

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Can any of the company-specific risk be diversified away by investing in both Graphjet Technology and BioForce Nanosciences 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 Graphjet Technology and BioForce Nanosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Graphjet Technology and BioForce Nanosciences Holdings, you can compare the effects of market volatilities on Graphjet Technology and BioForce Nanosciences 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 Graphjet Technology with a short position of BioForce Nanosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphjet Technology and BioForce Nanosciences.

Diversification Opportunities for Graphjet Technology and BioForce Nanosciences

0.63
  Correlation Coefficient

Poor diversification

The 3 months correlation between Graphjet and BioForce is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and BioForce Nanosciences Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BioForce Nanosciences and Graphjet Technology 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 Graphjet Technology are associated (or correlated) with BioForce Nanosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BioForce Nanosciences has no effect on the direction of Graphjet Technology i.e., Graphjet Technology and BioForce Nanosciences go up and down completely randomly.

Pair Corralation between Graphjet Technology and BioForce Nanosciences

Considering the 90-day investment horizon Graphjet Technology is expected to generate 1.82 times more return on investment than BioForce Nanosciences. However, Graphjet Technology is 1.82 times more volatile than BioForce Nanosciences Holdings. It trades about 0.02 of its potential returns per unit of risk. BioForce Nanosciences Holdings is currently generating about 0.01 per unit of risk. If you would invest  1,120  in Graphjet Technology on October 5, 2024 and sell it today you would lose (1,031) from holding Graphjet Technology or give up 92.05% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy90.32%
ValuesDaily Returns

Graphjet Technology  vs.  BioForce Nanosciences Holdings

 Performance 
       Timeline  
Graphjet Technology 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Graphjet Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.
BioForce Nanosciences 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in BioForce Nanosciences Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile basic indicators, BioForce Nanosciences demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Graphjet Technology and BioForce Nanosciences Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Graphjet Technology and BioForce Nanosciences

The main advantage of trading using opposite Graphjet Technology and BioForce Nanosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphjet Technology position performs unexpectedly, BioForce Nanosciences 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 BioForce Nanosciences will offset losses from the drop in BioForce Nanosciences' long position.
The idea behind Graphjet Technology and BioForce Nanosciences Holdings 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.

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