Correlation Between Graphene Solar and Worley Parsons

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

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

Diversification Opportunities for Graphene Solar and Worley Parsons

-0.77

Correlation Coefficient

Graphene Solar  Worley Parsons

Pay attention - limited upside

The 3 months correlation between Graphene and Worley is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Graphene Solar Technologies and Worley Parsons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Worley Parsons and Graphene Solar 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 Graphene Solar Technologies are associated (or correlated) with Worley Parsons. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Worley Parsons has no effect on the direction of Graphene Solar i.e., Graphene Solar and Worley Parsons go up and down completely randomly.

Pair Corralation between Graphene Solar and Worley Parsons

Given the investment horizon of 90 days Graphene Solar Technologies is expected to generate 15.41 times more return on investment than Worley Parsons. However, Graphene Solar is 15.41 times more volatile than Worley Parsons. It trades about 0.18 of its potential returns per unit of risk. Worley Parsons is currently generating about -0.06 per unit of risk. If you would invest  0.27  in Graphene Solar Technologies on February 4, 2024 and sell it today you would earn a total of  0.33  from holding Graphene Solar Technologies or generate 122.22% return on investment over 90 days.

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

Graphene Solar Technologies  vs.  Worley Parsons

Graphene Solar Techn

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Graphene Solar Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile basic indicators, Graphene Solar showed solid returns over the last few months and may actually be approaching a breakup point.

Worley Parsons

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Worley Parsons are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Worley Parsons may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Graphene Solar and Worley Parsons

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

The idea behind Graphene Solar Technologies and Worley Parsons 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.