Correlation Between Griffin Mining and Argo Group
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and Argo Group 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 Argo Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and Argo Group Limited, you can compare the effects of market volatilities on Griffin Mining and Argo Group 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 Argo Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Argo Group.
Diversification Opportunities for Griffin Mining and Argo Group
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Griffin and Argo is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Argo Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Argo Group Limited 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 Argo Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Argo Group Limited has no effect on the direction of Griffin Mining i.e., Griffin Mining and Argo Group go up and down completely randomly.
Pair Corralation between Griffin Mining and Argo Group
Assuming the 90 days trading horizon Griffin Mining is expected to generate 0.59 times more return on investment than Argo Group. However, Griffin Mining is 1.69 times less risky than Argo Group. It trades about 0.06 of its potential returns per unit of risk. Argo Group Limited is currently generating about -0.05 per unit of risk. If you would invest 8,600 in Griffin Mining on October 13, 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffin Mining vs. Argo Group Limited
Performance |
| Timeline |
| Griffin Mining |
| Argo Group Limited |
Griffin Mining and Argo Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and Argo Group
The main advantage of trading using opposite Griffin Mining and Argo Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, Argo Group 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 Argo Group will offset losses from the drop in Argo Group's long position.| Griffin Mining vs. CNH Industrial NV | Griffin Mining vs. AMG Advanced Metallurgical | Griffin Mining vs. Jacquet Metal Service | Griffin Mining vs. Future Metals NL |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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