Correlation Between GRIFFIN MINING and Hon Hai
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Hon Hai 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 Hon Hai 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 Hon Hai Precision, you can compare the effects of market volatilities on GRIFFIN MINING and Hon Hai 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 Hon Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Hon Hai.
Diversification Opportunities for GRIFFIN MINING and Hon Hai
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between GRIFFIN and Hon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Hon Hai Precision in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hon Hai Precision 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 Hon Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hon Hai Precision has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Hon Hai go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Hon Hai
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.06 times more return on investment than Hon Hai. However, GRIFFIN MINING is 1.06 times more volatile than Hon Hai Precision. It trades about 0.15 of its potential returns per unit of risk. Hon Hai Precision is currently generating about -0.05 per unit of risk. If you would invest 175.00 in GRIFFIN MINING LTD on October 11, 2024 and sell it today you would earn a total of 9.00 from holding GRIFFIN MINING LTD or generate 5.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Hon Hai Precision
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Hon Hai Precision |
GRIFFIN MINING and Hon Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Hon Hai
The main advantage of trading using opposite GRIFFIN MINING and Hon Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Hon Hai 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 Hon Hai will offset losses from the drop in Hon Hai's long position.| GRIFFIN MINING vs. INTERSHOP Communications Aktiengesellschaft | GRIFFIN MINING vs. Globex Mining Enterprises | GRIFFIN MINING vs. Geely Automobile Holdings | GRIFFIN MINING vs. Yanzhou Coal Mining |
| Hon Hai vs. SYSTEMAIR AB | Hon Hai vs. Mitsui Chemicals | Hon Hai vs. MCEWEN MINING INC | Hon Hai vs. GRIFFIN MINING LTD |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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