Correlation Between GRIFFIN MINING and Sumitomo Rubber
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Sumitomo Rubber 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 Sumitomo Rubber into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GRIFFIN MINING LTD and Sumitomo Rubber Industries, you can compare the effects of market volatilities on GRIFFIN MINING and Sumitomo Rubber 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 Sumitomo Rubber. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Sumitomo Rubber.
Diversification Opportunities for GRIFFIN MINING and Sumitomo Rubber
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between GRIFFIN and Sumitomo is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Sumitomo Rubber Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Rubber Indu 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 LTD are associated (or correlated) with Sumitomo Rubber. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Rubber Indu has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Sumitomo Rubber go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Sumitomo Rubber
Assuming the 90 days horizon GRIFFIN MINING is expected to generate 1.87 times less return on investment than Sumitomo Rubber. But when comparing it to its historical volatility, GRIFFIN MINING LTD is 2.68 times less risky than Sumitomo Rubber. It trades about 0.08 of its potential returns per unit of risk. Sumitomo Rubber Industries is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 346.00 in Sumitomo Rubber Industries on August 29, 2024 and sell it today you would earn a total of 694.00 from holding Sumitomo Rubber Industries or generate 200.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Sumitomo Rubber Industries
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Sumitomo Rubber Indu |
GRIFFIN MINING and Sumitomo Rubber Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Sumitomo Rubber
The main advantage of trading using opposite GRIFFIN MINING and Sumitomo Rubber positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Sumitomo Rubber 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 Sumitomo Rubber will offset losses from the drop in Sumitomo Rubber's long position.| GRIFFIN MINING vs. BW OFFSHORE LTD | GRIFFIN MINING vs. Eidesvik Offshore ASA | GRIFFIN MINING vs. Liberty Broadband | GRIFFIN MINING vs. Sekisui Chemical Co |
| Sumitomo Rubber vs. TRAINLINE PLC LS | Sumitomo Rubber vs. Liberty Broadband | Sumitomo Rubber vs. Air Transport Services | Sumitomo Rubber vs. TSOGO SUN GAMING |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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