Correlation Between Applied Graphene and H B

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

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

Diversification Opportunities for Applied Graphene and H B

-0.54

Correlation Coefficient

Applied Graphene  H B

Excellent diversification

The 3 months correlation between Applied and FUL is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Applied Graphene Materials and H B Fuller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H B Fuller and Applied Graphene 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 Applied Graphene Materials are associated (or correlated) with H B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H B Fuller has no effect on the direction of Applied Graphene i.e., Applied Graphene and H B go up and down completely randomly.

Pair Corralation between Applied Graphene and H B

If you would invest  0.01  in Applied Graphene Materials on September 5, 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 Against
Strength	Very Weak
Accuracy	59.38%
Values	Daily Returns

Applied Graphene Materials  vs.  H B Fuller

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.

H B Fuller

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H B Fuller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, H B is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Applied Graphene and H B

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

The idea behind Applied Graphene Materials and H B Fuller 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.