Correlation Between Griffin Mining and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and International Consolidated 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 International Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and International Consolidated Airlines, you can compare the effects of market volatilities on Griffin Mining and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and International Consolidated.
Diversification Opportunities for Griffin Mining and International Consolidated
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Griffin and International is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Griffin Mining i.e., Griffin Mining and International Consolidated go up and down completely randomly.
Pair Corralation between Griffin Mining and International Consolidated
Assuming the 90 days trading horizon Griffin Mining is expected to generate 3.92 times less return on investment than International Consolidated. In addition to that, Griffin Mining is 1.42 times more volatile than International Consolidated Airlines. It trades about 0.04 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.25 per unit of volatility. If you would invest 30,160 in International Consolidated Airlines on October 23, 2024 and sell it today you would earn a total of 2,110 from holding International Consolidated Airlines or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffin Mining vs. International Consolidated Air
Performance |
| Timeline |
| Griffin Mining |
| International Consolidated |
Griffin Mining and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and International Consolidated
The main advantage of trading using opposite Griffin Mining and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Griffin Mining vs. JB Hunt Transport | Griffin Mining vs. Lindsell Train Investment | Griffin Mining vs. Bloomsbury Publishing Plc | Griffin Mining vs. DXC Technology Co |
| International Consolidated vs. Clean Power Hydrogen | International Consolidated vs. Gruppo MutuiOnline SpA | International Consolidated vs. Iron Mountain | International Consolidated vs. Virgin Wines UK |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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