Correlation Between Focus Graphite and Greenland Minerals

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

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

Diversification Opportunities for Focus Graphite and Greenland Minerals

0.02

Correlation Coefficient

Focus Graphite  Greenland Minerals

Significant diversification

The 3 months correlation between Focus and Greenland is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Focus Graphite and Greenland Minerals And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Minerals And and Focus 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 Focus Graphite are associated (or correlated) with Greenland Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Minerals And has no effect on the direction of Focus Graphite i.e., Focus Graphite and Greenland Minerals go up and down completely randomly.

Pair Corralation between Focus Graphite and Greenland Minerals

Assuming the 90 days horizon Focus Graphite is expected to generate 31.98 times less return on investment than Greenland Minerals. But when comparing it to its historical volatility, Focus Graphite is 3.74 times less risky than Greenland Minerals. It trades about 0.02 of its potential returns per unit of risk. Greenland Minerals And is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  1.00  in Greenland Minerals And on September 16, 2024 and sell it today you would earn a total of  1.00  from holding Greenland Minerals And or generate 100.0% return on investment over 90 days.

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

Focus Graphite  vs.  Greenland Minerals And

Focus Graphite

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Focus Graphite are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal primary indicators, Focus Graphite may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Greenland Minerals And

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greenland Minerals And are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Greenland Minerals reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Focus Graphite and Greenland Minerals

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

The idea behind Focus Graphite and Greenland Minerals And 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.

Check out your portfolio center.

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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.