Correlation Between Nano Magic and Haydale Graphene

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

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

Diversification Opportunities for Nano Magic and Haydale Graphene

-0.01

Correlation Coefficient

Nano Magic  Haydale Graphene

Good diversification

The 3 months correlation between Nano and Haydale is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Nano Magic and Haydale Graphene Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haydale Graphene Ind and Nano Magic 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 Nano Magic are associated (or correlated) with Haydale Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haydale Graphene Ind has no effect on the direction of Nano Magic i.e., Nano Magic and Haydale Graphene go up and down completely randomly.

Pair Corralation between Nano Magic and Haydale Graphene

If you would invest  0.39  in Haydale Graphene Industries on September 4, 2024 and sell it today you would lose (0.13) from holding Haydale Graphene Industries or give up 33.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Nano Magic  vs.  Haydale Graphene Industries

Nano Magic

Risk-Adjusted Performance

0 of 100

Very Weak

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

Haydale Graphene Ind

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Haydale Graphene Industries are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical indicators, Haydale Graphene reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nano Magic and Haydale Graphene

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

The idea behind Nano Magic and Haydale Graphene Industries 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.