Correlation Between LOreal SA and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both LOreal SA and Griffin Mining 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 LOreal SA and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LOreal SA and Griffin Mining, you can compare the effects of market volatilities on LOreal SA and Griffin Mining 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 LOreal SA with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of LOreal SA and Griffin Mining.
Diversification Opportunities for LOreal SA and Griffin Mining
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LOreal and Griffin is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding LOreal SA and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and LOreal SA 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 LOreal SA are associated (or correlated) with Griffin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffin Mining has no effect on the direction of LOreal SA i.e., LOreal SA and Griffin Mining go up and down completely randomly.
Pair Corralation between LOreal SA and Griffin Mining
Assuming the 90 days trading horizon LOreal SA is expected to generate 7.29 times less return on investment than Griffin Mining. But when comparing it to its historical volatility, LOreal SA is 1.56 times less risky than Griffin Mining. It trades about 0.02 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7,450 in Griffin Mining on September 12, 2024 and sell it today you would earn a total of 6,950 from holding Griffin Mining or generate 93.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LOreal SA vs. Griffin Mining
Performance |
| Timeline |
| LOreal SA |
| Griffin Mining |
LOreal SA and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LOreal SA and Griffin Mining
The main advantage of trading using opposite LOreal SA and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LOreal SA position performs unexpectedly, Griffin Mining 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 Griffin Mining will offset losses from the drop in Griffin Mining's long position.| LOreal SA vs. Griffin Mining | LOreal SA vs. Hochschild Mining plc | LOreal SA vs. Norwegian Air Shuttle | LOreal SA vs. National Beverage Corp |
| Griffin Mining vs. Givaudan SA | Griffin Mining vs. Antofagasta PLC | Griffin Mining vs. Ferrexpo PLC | Griffin Mining vs. Atalaya Mining |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |