Correlation Between Griffin Mining and Southern Copper
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and Southern Copper 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 Southern Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and Southern Copper Corp, you can compare the effects of market volatilities on Griffin Mining and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Southern Copper.
Diversification Opportunities for Griffin Mining and Southern Copper
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffin and Southern is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Southern Copper Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper Corp 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper Corp has no effect on the direction of Griffin Mining i.e., Griffin Mining and Southern Copper go up and down completely randomly.
Pair Corralation between Griffin Mining and Southern Copper
Assuming the 90 days trading horizon Griffin Mining is expected to generate 1.06 times more return on investment than Southern Copper. However, Griffin Mining is 1.06 times more volatile than Southern Copper Corp. It trades about 0.04 of its potential returns per unit of risk. Southern Copper Corp is currently generating about -0.18 per unit of risk. If you would invest 14,400 in Griffin Mining on September 22, 2024 and sell it today you would earn a total of 200.00 from holding Griffin Mining or generate 1.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffin Mining vs. Southern Copper Corp
Performance |
| Timeline |
| Griffin Mining |
| Southern Copper Corp |
Griffin Mining and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and Southern Copper
The main advantage of trading using opposite Griffin Mining and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| Griffin Mining vs. Givaudan SA | Griffin Mining vs. Antofagasta PLC | Griffin Mining vs. Ferrexpo PLC | Griffin Mining vs. Atalaya Mining |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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