Correlation Between Kore Mining and Focus Graphite

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

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

Diversification Opportunities for Kore Mining and Focus Graphite

-0.34

Correlation Coefficient

Kore Mining  Focus Graphite

Very good diversification

The 3 months correlation between Kore and Focus is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kore Mining and Focus Graphite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Focus Graphite and Kore Mining 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 Kore Mining are associated (or correlated) with Focus Graphite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Focus Graphite has no effect on the direction of Kore Mining i.e., Kore Mining and Focus Graphite go up and down completely randomly.

Pair Corralation between Kore Mining and Focus Graphite

Assuming the 90 days trading horizon Kore Mining is expected to generate 2.06 times more return on investment than Focus Graphite. However, Kore Mining is 2.06 times more volatile than Focus Graphite. It trades about 0.06 of its potential returns per unit of risk. Focus Graphite is currently generating about -0.02 per unit of risk. If you would invest  2.00  in Kore Mining on September 12, 2024 and sell it today you would earn a total of  1.00  from holding Kore Mining or generate 50.0% return on investment over 90 days.

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

Kore Mining  vs.  Focus Graphite

Kore Mining

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kore Mining are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kore Mining showed solid returns over the last few months and may actually be approaching a breakup point.

Focus Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Focus Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Focus Graphite 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 Kore Mining and Focus Graphite

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

The idea behind Kore Mining and Focus Graphite 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.