Correlation Between Nanophase Technol and Applied Graphene

Can any of the company-specific risk be diversified away by investing in both Nanophase Technol and Applied Graphene 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 Nanophase Technol and Applied Graphene into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nanophase Technol and Applied Graphene Materials, you can compare the effects of market volatilities on Nanophase Technol and Applied Graphene 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 Nanophase Technol with a short position of Applied Graphene. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanophase Technol and Applied Graphene.

Diversification Opportunities for Nanophase Technol and Applied Graphene

0.85

Correlation Coefficient

Nanophase Technol  Applied Graphene

Very poor diversification

The 3 months correlation between Nanophase and Applied is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nanophase Technol and Applied Graphene Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Applied Graphene Mat and Nanophase Technol 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 Nanophase Technol are associated (or correlated) with Applied Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Applied Graphene Mat has no effect on the direction of Nanophase Technol i.e., Nanophase Technol and Applied Graphene go up and down completely randomly.

Pair Corralation between Nanophase Technol and Applied Graphene

If you would invest  0.01  in Applied Graphene Materials on September 3, 2024 and sell it today you would earn a total of  0.00  from holding Applied Graphene Materials or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	2.5%
Values	Daily Returns

Nanophase Technol  vs.  Applied Graphene Materials

Nanophase Technol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanophase Technol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Nanophase Technol is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Applied Graphene Mat

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nanophase Technol and Applied Graphene

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

The idea behind Nanophase Technol and Applied Graphene Materials 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 Correlations module to find global opportunities by holding instruments from different markets.