Correlation Between Griffin Mining and Spirent Communications
Can any of the company-specific risk be diversified away by investing in both Griffin Mining and Spirent Communications 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 Spirent Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffin Mining and Spirent Communications plc, you can compare the effects of market volatilities on Griffin Mining and Spirent Communications 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 Spirent Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Spirent Communications.
Diversification Opportunities for Griffin Mining and Spirent Communications
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Griffin and Spirent is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Spirent Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirent Communications 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 Spirent Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirent Communications has no effect on the direction of Griffin Mining i.e., Griffin Mining and Spirent Communications go up and down completely randomly.
Pair Corralation between Griffin Mining and Spirent Communications
Assuming the 90 days trading horizon Griffin Mining is expected to under-perform the Spirent Communications. In addition to that, Griffin Mining is 2.48 times more volatile than Spirent Communications plc. It trades about -0.1 of its total potential returns per unit of risk. Spirent Communications plc is currently generating about 0.08 per unit of volatility. If you would invest 17,500 in Spirent Communications plc on September 13, 2024 and sell it today you would earn a total of 500.00 from holding Spirent Communications plc or generate 2.86% 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. Spirent Communications plc
Performance |
| Timeline |
| Griffin Mining |
| Spirent Communications |
Griffin Mining and Spirent Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffin Mining and Spirent Communications
The main advantage of trading using opposite Griffin Mining and Spirent Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, Spirent Communications 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 Spirent Communications will offset losses from the drop in Spirent Communications' long position.| Griffin Mining vs. Givaudan SA | Griffin Mining vs. Antofagasta PLC | Griffin Mining vs. Ferrexpo PLC | Griffin Mining vs. Atalaya Mining |
| Spirent Communications vs. National Atomic Co | Spirent Communications vs. Flutter Entertainment PLC | Spirent Communications vs. Camellia Plc | Spirent Communications vs. Marwyn Value Investors |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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