Correlation Between Caledonia Investments and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both Caledonia Investments 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 Caledonia Investments and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caledonia Investments and Griffin Mining, you can compare the effects of market volatilities on Caledonia Investments 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 Caledonia Investments with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caledonia Investments and Griffin Mining.
Diversification Opportunities for Caledonia Investments and Griffin Mining
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Caledonia and Griffin is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Caledonia Investments and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Caledonia Investments 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 Caledonia Investments 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 Caledonia Investments i.e., Caledonia Investments and Griffin Mining go up and down completely randomly.
Pair Corralation between Caledonia Investments and Griffin Mining
Assuming the 90 days trading horizon Caledonia Investments is expected to generate 0.38 times more return on investment than Griffin Mining. However, Caledonia Investments is 2.64 times less risky than Griffin Mining. It trades about 0.1 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.02 per unit of risk. If you would invest 342,987 in Caledonia Investments on November 2, 2024 and sell it today you would earn a total of 31,013 from holding Caledonia Investments or generate 9.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.06% |
| Values | Daily Returns |
Caledonia Investments vs. Griffin Mining
Performance |
| Timeline |
| Caledonia Investments |
| Griffin Mining |
Caledonia Investments and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caledonia Investments and Griffin Mining
The main advantage of trading using opposite Caledonia Investments and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caledonia Investments 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.| Caledonia Investments vs. GreenX Metals | Caledonia Investments vs. European Metals Holdings | Caledonia Investments vs. Cornish Metals | Caledonia Investments vs. Empire Metals Limited |
| Griffin Mining vs. Check Point Software | Griffin Mining vs. Vietnam Enterprise Investments | Griffin Mining vs. Monks Investment Trust | Griffin Mining vs. Mobius Investment Trust |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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