Correlation Between Spotify Technology and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both Spotify Technology 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 Spotify Technology and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spotify Technology SA and Griffin Mining, you can compare the effects of market volatilities on Spotify Technology 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 Spotify Technology with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spotify Technology and Griffin Mining.
Diversification Opportunities for Spotify Technology and Griffin Mining
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Spotify and Griffin is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Spotify Technology SA and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Spotify Technology 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 Spotify Technology 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 Spotify Technology i.e., Spotify Technology and Griffin Mining go up and down completely randomly.
Pair Corralation between Spotify Technology and Griffin Mining
Assuming the 90 days trading horizon Spotify Technology is expected to generate 1.83 times less return on investment than Griffin Mining. But when comparing it to its historical volatility, Spotify Technology SA is 1.07 times less risky than Griffin Mining. It trades about 0.22 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 14,300 in Griffin Mining on November 28, 2024 and sell it today you would earn a total of 4,000 from holding Griffin Mining or generate 27.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spotify Technology SA vs. Griffin Mining
Performance |
| Timeline |
| Spotify Technology |
| Griffin Mining |
Spotify Technology and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spotify Technology and Griffin Mining
The main advantage of trading using opposite Spotify Technology and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spotify Technology 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.| Spotify Technology vs. Home Depot | Spotify Technology vs. Weiss Korea Opportunity | Spotify Technology vs. River and Mercantile | Spotify Technology vs. Chrysalis Investments |
| Griffin Mining vs. Air Products Chemicals | Griffin Mining vs. Cardinal Health | Griffin Mining vs. Planet Fitness Cl | Griffin Mining vs. Systemair AB |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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