Correlation Between GRIFFIN MINING and Essentra Plc
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Essentra Plc 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 Essentra Plc 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 Essentra plc, you can compare the effects of market volatilities on GRIFFIN MINING and Essentra Plc 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 Essentra Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Essentra Plc.
Diversification Opportunities for GRIFFIN MINING and Essentra Plc
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GRIFFIN and Essentra is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Essentra plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Essentra plc 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 Essentra Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Essentra plc has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Essentra Plc go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Essentra Plc
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.05 times more return on investment than Essentra Plc. However, GRIFFIN MINING is 1.05 times more volatile than Essentra plc. It trades about 0.12 of its potential returns per unit of risk. Essentra plc is currently generating about -0.01 per unit of risk. If you would invest 111.00 in GRIFFIN MINING LTD on September 1, 2024 and sell it today you would earn a total of 61.00 from holding GRIFFIN MINING LTD or generate 54.95% 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. Essentra plc
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Essentra plc |
GRIFFIN MINING and Essentra Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Essentra Plc
The main advantage of trading using opposite GRIFFIN MINING and Essentra Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Essentra Plc 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 Essentra Plc will offset losses from the drop in Essentra Plc's long position.| GRIFFIN MINING vs. Microbot Medical | GRIFFIN MINING vs. VIRGIN WINES UK | GRIFFIN MINING vs. Japan Medical Dynamic | GRIFFIN MINING vs. JAPAN TOBACCO UNSPADR12 |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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