Correlation Between Graphex Group and Northern Dynasty

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

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

Diversification Opportunities for Graphex Group and Northern Dynasty

-0.32

Correlation Coefficient

Graphex Group  Northern Dynasty

Very good diversification

The 3 months correlation between Graphex and Northern is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Graphex Group Limited and Northern Dynasty Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Northern Dynasty Minerals and Graphex Group 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 Graphex Group Limited are associated (or correlated) with Northern Dynasty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Northern Dynasty Minerals has no effect on the direction of Graphex Group i.e., Graphex Group and Northern Dynasty go up and down completely randomly.

Pair Corralation between Graphex Group and Northern Dynasty

Given the investment horizon of 90 days Graphex Group Limited is expected to generate 2.81 times more return on investment than Northern Dynasty. However, Graphex Group is 2.81 times more volatile than Northern Dynasty Minerals. It trades about 0.05 of its potential returns per unit of risk. Northern Dynasty Minerals is currently generating about 0.13 per unit of risk. If you would invest  20.00  in Graphex Group Limited on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Graphex Group Limited or generate 0.0% return on investment over 90 days.

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

Graphex Group Limited  vs.  Northern Dynasty Minerals

Graphex Group Limited

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Graphex Group Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Graphex Group showed solid returns over the last few months and may actually be approaching a breakup point.

Northern Dynasty Minerals

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Northern Dynasty Minerals are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Northern Dynasty disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Graphex Group and Northern Dynasty

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

The idea behind Graphex Group Limited and Northern Dynasty Minerals 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.