Correlation Between Univar and First Graphene

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

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

Diversification Opportunities for Univar and First Graphene

-0.86

Correlation Coefficient

Univar  First Graphene

Pay attention - limited upside

The 3 months correlation between Univar and First is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Univar Inc and First Graphene in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Graphene and Univar 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 Univar Inc are associated (or correlated) with First Graphene. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Graphene has no effect on the direction of Univar i.e., Univar and First Graphene go up and down completely randomly.

Pair Corralation between Univar and First Graphene

If you would invest  3,593  in Univar Inc on September 20, 2024 and sell it today you would earn a total of  0.00  from holding Univar Inc or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	1.59%
Values	Daily Returns

Univar Inc  vs.  First Graphene

Univar Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Univar Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Univar is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

First Graphene

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days First Graphene has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile 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.

Pair Trading with Univar and First Graphene

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

The idea behind Univar Inc and First Graphene 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.