Correlation Between Graphjet Technology and Ryohin Keikaku

Can any of the company-specific risk be diversified away by investing in both Graphjet Technology and Ryohin Keikaku 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 Ryohin Keikaku into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Graphjet Technology and Ryohin Keikaku Co, you can compare the effects of market volatilities on Graphjet Technology and Ryohin Keikaku 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 Ryohin Keikaku. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphjet Technology and Ryohin Keikaku.

Diversification Opportunities for Graphjet Technology and Ryohin Keikaku

-0.6

Correlation Coefficient

Graphjet Technology  Ryohin Keikaku

Excellent diversification

The 3 months correlation between Graphjet and Ryohin is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and Ryohin Keikaku Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ryohin Keikaku 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 Ryohin Keikaku. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ryohin Keikaku has no effect on the direction of Graphjet Technology i.e., Graphjet Technology and Ryohin Keikaku go up and down completely randomly.

Pair Corralation between Graphjet Technology and Ryohin Keikaku

Considering the 90-day investment horizon Graphjet Technology is expected to generate 13.55 times more return on investment than Ryohin Keikaku. However, Graphjet Technology is 13.55 times more volatile than Ryohin Keikaku Co. It trades about 0.08 of its potential returns per unit of risk. Ryohin Keikaku Co is currently generating about 0.12 per unit of risk. If you would invest  276.00  in Graphjet Technology on October 6, 2024 and sell it today you would lose (187.00) from holding Graphjet Technology or give up 67.75% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Graphjet Technology  vs.  Ryohin Keikaku Co

Graphjet Technology

Risk-Adjusted Performance

4 of 100

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 weak basic indicators, Graphjet Technology demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ryohin Keikaku

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ryohin Keikaku Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain forward-looking signals, Ryohin Keikaku showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Graphjet Technology and Ryohin Keikaku

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

The idea behind Graphjet Technology and Ryohin Keikaku Co 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.