Correlation Between Griffin Mining and Discover Financial
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and Discover Financial 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 Griffin Mining and Discover Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and Discover Financial Services, you can compare the effects of market volatilities on Griffin Mining and Discover Financial 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 Griffin Mining with a short position of Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Discover Financial.
Diversification Opportunities for Griffin Mining and Discover Financial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Griffin and Discover is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Discover Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discover Financial and Griffin Mining 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 Griffin Mining are associated (or correlated) with Discover Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discover Financial has no effect on the direction of Griffin Mining i.e., Griffin Mining and Discover Financial go up and down completely randomly.
Pair Corralation between Griffin Mining and Discover Financial
Assuming the 90 days trading horizon Griffin Mining is expected to generate 1.83 times more return on investment than Discover Financial. However, Griffin Mining is 1.83 times more volatile than Discover Financial Services. It trades about -0.01 of its potential returns per unit of risk. Discover Financial Services is currently generating about -0.02 per unit of risk. If you would invest 14,750 in Griffin Mining on October 12, 2024 and sell it today you would lose (300.00) from holding Griffin Mining or give up 2.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Griffin Mining vs. Discover Financial Services
Performance |
| Timeline |
| Griffin Mining |
| Discover Financial |
Griffin Mining and Discover Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and Discover Financial
The main advantage of trading using opposite Griffin Mining and Discover Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, Discover Financial 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 Discover Financial will offset losses from the drop in Discover Financial's long position.| Griffin Mining vs. Zoom Video Communications | Griffin Mining vs. Infrastrutture Wireless Italiane | Griffin Mining vs. Cellnex Telecom SA | Griffin Mining vs. Zegona Communications Plc |
| Discover Financial vs. Griffin Mining | Discover Financial vs. Pfeiffer Vacuum Technology | Discover Financial vs. Endeavour Mining Corp | Discover Financial vs. Silver Bullet Data |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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