Correlation Between Future Metals and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both Future Metals 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 Future Metals and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Future Metals NL and Griffin Mining, you can compare the effects of market volatilities on Future Metals 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 Future Metals with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Future Metals and Griffin Mining.
Diversification Opportunities for Future Metals and Griffin Mining
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Future and Griffin is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Future Metals NL and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Future Metals 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 Future Metals NL 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 Future Metals i.e., Future Metals and Griffin Mining go up and down completely randomly.
Pair Corralation between Future Metals and Griffin Mining
Assuming the 90 days trading horizon Future Metals NL is expected to under-perform the Griffin Mining. In addition to that, Future Metals is 2.25 times more volatile than Griffin Mining. It trades about -0.07 of its total potential returns per unit of risk. Griffin Mining is currently generating about 0.06 per unit of volatility. If you would invest 8,600 in Griffin Mining on October 14, 2024 and sell it today you would earn a total of 5,700 from holding Griffin Mining or generate 66.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Future Metals NL vs. Griffin Mining
Performance |
| Timeline |
| Future Metals NL |
| Griffin Mining |
Future Metals and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Future Metals and Griffin Mining
The main advantage of trading using opposite Future Metals and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Future Metals 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.| Future Metals vs. Qurate Retail Series | Future Metals vs. JLEN Environmental Assets | Future Metals vs. Flow Traders NV | Future Metals vs. Spotify Technology SA |
| Griffin Mining vs. CNH Industrial NV | Griffin Mining vs. AMG Advanced Metallurgical | Griffin Mining vs. Jacquet Metal Service | Griffin Mining vs. Future Metals NL |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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