Correlation Between Nouveau Monde and Gratomic

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

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

Diversification Opportunities for Nouveau Monde and Gratomic

0.08

Correlation Coefficient

Nouveau Monde  Gratomic

Significant diversification

The 3 months correlation between Nouveau and Gratomic is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Nouveau Monde Graphite and Gratomic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gratomic and Nouveau Monde 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 Nouveau Monde Graphite are associated (or correlated) with Gratomic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gratomic has no effect on the direction of Nouveau Monde i.e., Nouveau Monde and Gratomic go up and down completely randomly.

Pair Corralation between Nouveau Monde and Gratomic

Assuming the 90 days horizon Nouveau Monde Graphite is expected to under-perform the Gratomic. But the stock apears to be less risky and, when comparing its historical volatility, Nouveau Monde Graphite is 3.56 times less risky than Gratomic. The stock trades about -0.08 of its potential returns per unit of risk. The Gratomic is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  6.50  in Gratomic on September 3, 2024 and sell it today you would lose (1.50) from holding Gratomic or give up 23.08% of portfolio value over 90 days.

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

Nouveau Monde Graphite  vs.  Gratomic

Nouveau Monde Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nouveau Monde Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Gratomic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gratomic has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Gratomic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Nouveau Monde and Gratomic

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

The idea behind Nouveau Monde Graphite and Gratomic 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.