Correlation Between GRIFFIN MINING and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Sumitomo Mitsui 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 Mitsui 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 Mitsui Construction, you can compare the effects of market volatilities on GRIFFIN MINING and Sumitomo Mitsui 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 Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Sumitomo Mitsui.
Diversification Opportunities for GRIFFIN MINING and Sumitomo Mitsui
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GRIFFIN and Sumitomo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Sumitomo Mitsui Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Cons 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 Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Cons has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Sumitomo Mitsui
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 0.99 times more return on investment than Sumitomo Mitsui. However, GRIFFIN MINING LTD is 1.01 times less risky than Sumitomo Mitsui. It trades about -0.04 of its potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about -0.16 per unit of risk. If you would invest 175.00 in GRIFFIN MINING LTD on August 24, 2024 and sell it today you would lose (3.00) from holding GRIFFIN MINING LTD or give up 1.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Sumitomo Mitsui Cons |
GRIFFIN MINING and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Sumitomo Mitsui
The main advantage of trading using opposite GRIFFIN MINING and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Sumitomo Mitsui 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 Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
| Sumitomo Mitsui vs. Goosehead Insurance | Sumitomo Mitsui vs. MCEWEN MINING INC | Sumitomo Mitsui vs. United Insurance Holdings | Sumitomo Mitsui vs. Safety Insurance Group |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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