Correlation Between Mason Graphite and Global Helium

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

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

Diversification Opportunities for Mason Graphite and Global Helium

0.71

Correlation Coefficient

Mason Graphite  Global Helium

Poor diversification

The 3 months correlation between Mason and Global is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Mason Graphite and Global Helium Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Helium Corp and Mason 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 Mason Graphite are associated (or correlated) with Global Helium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Helium Corp has no effect on the direction of Mason Graphite i.e., Mason Graphite and Global Helium go up and down completely randomly.

Pair Corralation between Mason Graphite and Global Helium

Assuming the 90 days horizon Mason Graphite is expected to under-perform the Global Helium. But the otc stock apears to be less risky and, when comparing its historical volatility, Mason Graphite is 2.2 times less risky than Global Helium. The otc stock trades about -0.08 of its potential returns per unit of risk. The Global Helium Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6.51  in Global Helium Corp on September 3, 2024 and sell it today you would lose (3.33) from holding Global Helium Corp or give up 51.15% of portfolio value over 90 days.

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

Mason Graphite  vs.  Global Helium Corp

Mason Graphite

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mason Graphite has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Global Helium Corp

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Mason Graphite and Global Helium

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

The idea behind Mason Graphite and Global Helium Corp 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.