Correlation Between IperionX Limited and Graphex Group

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

By analyzing existing cross correlation between IperionX Limited American and Graphex Group Limited, you can compare the effects of market volatilities on IperionX Limited and Graphex Group 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 IperionX Limited with a short position of Graphex Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of IperionX Limited and Graphex Group.

Diversification Opportunities for IperionX Limited and Graphex Group

-0.76

Correlation Coefficient

IperionX Limited  Graphex Group

Pay attention - limited upside

The 3 months correlation between IperionX and Graphex is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding IperionX Limited American and Graphex Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graphex Group Limited and IperionX Limited 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 IperionX Limited American are associated (or correlated) with Graphex Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graphex Group Limited has no effect on the direction of IperionX Limited i.e., IperionX Limited and Graphex Group go up and down completely randomly.

Pair Corralation between IperionX Limited and Graphex Group

Considering the 90-day investment horizon IperionX Limited American is expected to generate 0.52 times more return on investment than Graphex Group. However, IperionX Limited American is 1.92 times less risky than Graphex Group. It trades about 0.2 of its potential returns per unit of risk. Graphex Group Limited is currently generating about -0.26 per unit of risk. If you would invest  1,536  in IperionX Limited American on June 21, 2024 and sell it today you would earn a total of  274.00  from holding IperionX Limited American or generate 17.84% return on investment over 90 days.

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

IperionX Limited American  vs.  Graphex Group Limited

IperionX Limited American

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IperionX Limited American are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, IperionX Limited showed solid returns over the last few months and may actually be approaching a breakup point.

Graphex Group Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Graphex Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with IperionX Limited and Graphex Group

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

The idea behind IperionX Limited American and Graphex Group Limited 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.