Correlation Between Pan American and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both Pan American 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 Pan American and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pan American Silver and Griffin Mining, you can compare the effects of market volatilities on Pan American 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 Pan American with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pan American and Griffin Mining.
Diversification Opportunities for Pan American and Griffin Mining
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Pan and Griffin is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Pan American Silver and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Pan American 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 Pan American Silver 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 Pan American i.e., Pan American and Griffin Mining go up and down completely randomly.
Pair Corralation between Pan American and Griffin Mining
Assuming the 90 days trading horizon Pan American Silver is expected to under-perform the Griffin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Pan American Silver is 1.06 times less risky than Griffin Mining. The stock trades about -0.09 of its potential returns per unit of risk. The Griffin Mining is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 14,200 in Griffin Mining on October 20, 2024 and sell it today you would earn a total of 450.00 from holding Griffin Mining or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
Pan American Silver vs. Griffin Mining
Performance |
| Timeline |
| Pan American Silver |
| Griffin Mining |
Pan American and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pan American and Griffin Mining
The main advantage of trading using opposite Pan American and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pan American 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.| Pan American vs. Ecclesiastical Insurance Office | Pan American vs. Tata Steel Limited | Pan American vs. Fortune Brands Home | Pan American vs. Waste Management |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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