Correlation Between Griffin Mining and Nippon Active
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and Nippon Active 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 Nippon Active into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and Nippon Active Value, you can compare the effects of market volatilities on Griffin Mining and Nippon Active 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 Nippon Active. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Nippon Active.
Diversification Opportunities for Griffin Mining and Nippon Active
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Griffin and Nippon is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Nippon Active Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Active Value 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 Nippon Active. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Active Value has no effect on the direction of Griffin Mining i.e., Griffin Mining and Nippon Active go up and down completely randomly.
Pair Corralation between Griffin Mining and Nippon Active
Assuming the 90 days trading horizon Griffin Mining is expected to generate 1.8 times more return on investment than Nippon Active. However, Griffin Mining is 1.8 times more volatile than Nippon Active Value. It trades about 0.03 of its potential returns per unit of risk. Nippon Active Value is currently generating about 0.04 per unit of risk. If you would invest 14,500 in Griffin Mining on September 25, 2024 and sell it today you would earn a total of 100.00 from holding Griffin Mining or generate 0.69% 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. Nippon Active Value
Performance |
| Timeline |
| Griffin Mining |
| Nippon Active Value |
Griffin Mining and Nippon Active Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and Nippon Active
The main advantage of trading using opposite Griffin Mining and Nippon Active positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, Nippon Active 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 Nippon Active will offset losses from the drop in Nippon Active'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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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