Correlation Between Graphene Manufacturing and Nano One

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

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

Diversification Opportunities for Graphene Manufacturing and Nano One

0.18

Correlation Coefficient

Graphene Manufacturing  Nano One

Average diversification

The 3 months correlation between Graphene and Nano is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Manufacturing Group and Nano One Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nano One Materials and Graphene Manufacturing 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 Graphene Manufacturing Group are associated (or correlated) with Nano One. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nano One Materials has no effect on the direction of Graphene Manufacturing i.e., Graphene Manufacturing and Nano One go up and down completely randomly.

Pair Corralation between Graphene Manufacturing and Nano One

Assuming the 90 days horizon Graphene Manufacturing Group is expected to generate 1.18 times more return on investment than Nano One. However, Graphene Manufacturing is 1.18 times more volatile than Nano One Materials. It trades about -0.03 of its potential returns per unit of risk. Nano One Materials is currently generating about -0.05 per unit of risk. If you would invest  107.00  in Graphene Manufacturing Group on September 12, 2024 and sell it today you would lose (64.00) from holding Graphene Manufacturing Group or give up 59.81% of portfolio value over 90 days.

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

Graphene Manufacturing Group  vs.  Nano One Materials

Graphene Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nano One Materials

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nano One Materials are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile primary indicators, Nano One reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Graphene Manufacturing and Nano One

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

The idea behind Graphene Manufacturing Group and Nano One Materials 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.