Correlation Between Griffin Mining and Spotify Technology
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and Spotify Technology 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 Spotify Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and Spotify Technology SA, you can compare the effects of market volatilities on Griffin Mining and Spotify Technology 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 Spotify Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Spotify Technology.
Diversification Opportunities for Griffin Mining and Spotify Technology
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Griffin and Spotify is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Spotify Technology SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spotify Technology 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 Spotify Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spotify Technology has no effect on the direction of Griffin Mining i.e., Griffin Mining and Spotify Technology go up and down completely randomly.
Pair Corralation between Griffin Mining and Spotify Technology
Assuming the 90 days trading horizon Griffin Mining is expected to generate 2.12 times less return on investment than Spotify Technology. But when comparing it to its historical volatility, Griffin Mining is 1.26 times less risky than Spotify Technology. It trades about 0.08 of its potential returns per unit of risk. Spotify Technology SA is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 13,878 in Spotify Technology SA on September 2, 2024 and sell it today you would earn a total of 31,267 from holding Spotify Technology SA or generate 225.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.95% |
| Values | Daily Returns |
Griffin Mining vs. Spotify Technology SA
Performance |
| Timeline |
| Griffin Mining |
| Spotify Technology |
Griffin Mining and Spotify Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and Spotify Technology
The main advantage of trading using opposite Griffin Mining and Spotify Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, Spotify Technology 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 Spotify Technology will offset losses from the drop in Spotify Technology's long position.| Griffin Mining vs. DXC Technology Co | Griffin Mining vs. Auction Technology Group | Griffin Mining vs. Zoom Video Communications | Griffin Mining vs. Spotify Technology SA |
| Spotify Technology vs. Ecclesiastical Insurance Office | Spotify Technology vs. Associated British Foods | Spotify Technology vs. Wyndham Hotels Resorts | Spotify Technology vs. Host Hotels Resorts |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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