Correlation Between Northern Graphite and Regent Ventures

Can any of the company-specific risk be diversified away by investing in both Northern Graphite and Regent Ventures 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 Northern Graphite and Regent Ventures into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Northern Graphite and Regent Ventures, you can compare the effects of market volatilities on Northern Graphite and Regent Ventures 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 Northern Graphite with a short position of Regent Ventures. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northern Graphite and Regent Ventures.

Diversification Opportunities for Northern Graphite and Regent Ventures

0.0

Correlation Coefficient

Northern Graphite  Regent Ventures

Pay attention - limited upside

The 3 months correlation between Northern and Regent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Northern Graphite and Regent Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regent Ventures and Northern Graphite 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 Northern Graphite are associated (or correlated) with Regent Ventures. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regent Ventures has no effect on the direction of Northern Graphite i.e., Northern Graphite and Regent Ventures go up and down completely randomly.

Pair Corralation between Northern Graphite and Regent Ventures

If you would invest  29.00  in Northern Graphite on October 22, 2024 and sell it today you would lose (18.00) from holding Northern Graphite or give up 62.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Northern Graphite  vs.  Regent Ventures

Northern Graphite

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Graphite are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile technical indicators, Northern Graphite reported solid returns over the last few months and may actually be approaching a breakup point.

Regent Ventures

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Northern Graphite and Regent Ventures

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

The idea behind Northern Graphite and Regent Ventures 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..