Correlation Between Graphjet Technology and Westwater Resources

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

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

Diversification Opportunities for Graphjet Technology and Westwater Resources

0.32

Correlation Coefficient

Graphjet Technology  Westwater Resources

Weak diversification

The 3 months correlation between Graphjet and Westwater is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Graphjet Technology and Westwater Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westwater Resources 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 Westwater Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westwater Resources has no effect on the direction of Graphjet Technology i.e., Graphjet Technology and Westwater Resources go up and down completely randomly.

Pair Corralation between Graphjet Technology and Westwater Resources

Considering the 90-day investment horizon Graphjet Technology is expected to under-perform the Westwater Resources. In addition to that, Graphjet Technology is 1.44 times more volatile than Westwater Resources. It trades about -0.35 of its total potential returns per unit of risk. Westwater Resources is currently generating about -0.07 per unit of volatility. If you would invest  86.00  in Westwater Resources on December 29, 2024 and sell it today you would lose (30.00) from holding Westwater Resources or give up 34.88% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Graphjet Technology  vs.  Westwater Resources

Graphjet Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graphjet Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Westwater Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Westwater Resources has generated negative risk-adjusted returns adding no value to investors with long positions. Even with fragile performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Graphjet Technology and Westwater Resources

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

The idea behind Graphjet Technology and Westwater Resources 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.