Correlation Between Nanophase Technol and G6 Materials

Can any of the company-specific risk be diversified away by investing in both Nanophase Technol and G6 Materials 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 Nanophase Technol and G6 Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nanophase Technol and G6 Materials Corp, you can compare the effects of market volatilities on Nanophase Technol and G6 Materials 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 Nanophase Technol with a short position of G6 Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nanophase Technol and G6 Materials.

Diversification Opportunities for Nanophase Technol and G6 Materials

-0.3

Correlation Coefficient

Nanophase Technol  G6 Materials

Very good diversification

The 3 months correlation between Nanophase and GPHBF is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Nanophase Technol and G6 Materials Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G6 Materials Corp and Nanophase Technol 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 Nanophase Technol are associated (or correlated) with G6 Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G6 Materials Corp has no effect on the direction of Nanophase Technol i.e., Nanophase Technol and G6 Materials go up and down completely randomly.

Pair Corralation between Nanophase Technol and G6 Materials

If you would invest  3.00  in G6 Materials Corp on September 5, 2024 and sell it today you would earn a total of  0.10  from holding G6 Materials Corp or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	4.55%
Values	Daily Returns

Nanophase Technol  vs.  G6 Materials Corp

Nanophase Technol

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nanophase Technol has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Nanophase Technol is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

G6 Materials Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G6 Materials Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nanophase Technol and G6 Materials

The main advantage of trading using opposite Nanophase Technol and G6 Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nanophase Technol position performs unexpectedly, G6 Materials 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 G6 Materials will offset losses from the drop in G6 Materials' long position.

The idea behind Nanophase Technol and G6 Materials 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.