Correlation Between Neinor Homes and GRIFFIN MINING
Can any of the company-specific risk be diversified away by investing in both Neinor Homes 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 Neinor Homes and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Neinor Homes 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 Neinor Homes with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and GRIFFIN MINING.
Diversification Opportunities for Neinor Homes and GRIFFIN MINING
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Neinor and GRIFFIN is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD and Neinor Homes 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 Neinor Homes 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 LTD has no effect on the direction of Neinor Homes i.e., Neinor Homes and GRIFFIN MINING go up and down completely randomly.
Pair Corralation between Neinor Homes and GRIFFIN MINING
Assuming the 90 days trading horizon Neinor Homes is expected to generate 1.21 times less return on investment than GRIFFIN MINING. But when comparing it to its historical volatility, Neinor Homes SA is 1.18 times less risky than GRIFFIN MINING. It trades about 0.12 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 90.00 in GRIFFIN MINING LTD on September 14, 2024 and sell it today you would earn a total of 82.00 from holding GRIFFIN MINING LTD or generate 91.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.64% |
| Values | Daily Returns |
Neinor Homes SA vs. GRIFFIN MINING LTD
Performance |
| Timeline |
| Neinor Homes SA |
| GRIFFIN MINING LTD |
Neinor Homes and GRIFFIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and GRIFFIN MINING
The main advantage of trading using opposite Neinor Homes and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes 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.| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
| GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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