Correlation Between GRIFFIN MINING and Motorcar Parts
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Motorcar Parts 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 Motorcar Parts 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 Motorcar Parts of, you can compare the effects of market volatilities on GRIFFIN MINING and Motorcar Parts 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 Motorcar Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Motorcar Parts.
Diversification Opportunities for GRIFFIN MINING and Motorcar Parts
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GRIFFIN and Motorcar is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Motorcar Parts of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorcar Parts 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 Motorcar Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorcar Parts has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Motorcar Parts go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Motorcar Parts
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to under-perform the Motorcar Parts. But the stock apears to be less risky and, when comparing its historical volatility, GRIFFIN MINING LTD is 1.91 times less risky than Motorcar Parts. The stock trades about -0.02 of its potential returns per unit of risk. The Motorcar Parts of is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 510.00 in Motorcar Parts of on August 29, 2024 and sell it today you would earn a total of 155.00 from holding Motorcar Parts of or generate 30.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Motorcar Parts of
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Motorcar Parts |
GRIFFIN MINING and Motorcar Parts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Motorcar Parts
The main advantage of trading using opposite GRIFFIN MINING and Motorcar Parts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Motorcar Parts 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 Motorcar Parts will offset losses from the drop in Motorcar Parts' 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 |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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