Correlation Between GRIFFIN MINING and Chunghwa Telecom
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Chunghwa Telecom 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 Chunghwa Telecom 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 Chunghwa Telecom Co, you can compare the effects of market volatilities on GRIFFIN MINING and Chunghwa Telecom 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 Chunghwa Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Chunghwa Telecom.
Diversification Opportunities for GRIFFIN MINING and Chunghwa Telecom
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GRIFFIN and Chunghwa is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Chunghwa Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chunghwa Telecom 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 Chunghwa Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chunghwa Telecom has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Chunghwa Telecom go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Chunghwa Telecom
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 2.51 times more return on investment than Chunghwa Telecom. However, GRIFFIN MINING is 2.51 times more volatile than Chunghwa Telecom Co. It trades about 0.08 of its potential returns per unit of risk. Chunghwa Telecom Co is currently generating about 0.03 per unit of risk. If you would invest 81.00 in GRIFFIN MINING LTD on August 28, 2024 and sell it today you would earn a total of 89.00 from holding GRIFFIN MINING LTD or generate 109.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Chunghwa Telecom Co
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Chunghwa Telecom |
GRIFFIN MINING and Chunghwa Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Chunghwa Telecom
The main advantage of trading using opposite GRIFFIN MINING and Chunghwa Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Chunghwa Telecom 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 Chunghwa Telecom will offset losses from the drop in Chunghwa Telecom's long position.| GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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