Correlation Between Nano One and G6 Materials

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

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

Diversification Opportunities for Nano One and G6 Materials

-0.09

Correlation Coefficient

Nano One  G6 Materials

Good diversification

The 3 months correlation between Nano and GPHBF is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nano One Materials 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 Nano One 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 Nano One Materials 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 Nano One i.e., Nano One and G6 Materials go up and down completely randomly.

Pair Corralation between Nano One and G6 Materials

Assuming the 90 days horizon Nano One Materials is expected to generate 0.5 times more return on investment than G6 Materials. However, Nano One Materials is 1.99 times less risky than G6 Materials. It trades about 0.11 of its potential returns per unit of risk. G6 Materials Corp is currently generating about -0.01 per unit of risk. If you would invest  52.00  in Nano One Materials on September 12, 2024 and sell it today you would earn a total of  19.00  from holding Nano One Materials or generate 36.54% return on investment over 90 days.

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

Nano One Materials  vs.  G6 Materials Corp

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.

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 fragile 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 Nano One and G6 Materials

The main advantage of trading using opposite Nano One and G6 Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nano One 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 Nano One Materials 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.

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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.