Correlation Between GRIFFIN MINING and Japan Tobacco
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Japan Tobacco 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 Japan Tobacco 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 Japan Tobacco, you can compare the effects of market volatilities on GRIFFIN MINING and Japan Tobacco 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 Japan Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Japan Tobacco.
Diversification Opportunities for GRIFFIN MINING and Japan Tobacco
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GRIFFIN and Japan is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Japan Tobacco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Japan Tobacco 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 Japan Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Japan Tobacco has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Japan Tobacco go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Japan Tobacco
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.37 times more return on investment than Japan Tobacco. However, GRIFFIN MINING is 1.37 times more volatile than Japan Tobacco. It trades about 0.08 of its potential returns per unit of risk. Japan Tobacco is currently generating about 0.04 per unit of risk. If you would invest 80.00 in GRIFFIN MINING LTD on August 29, 2024 and sell it today you would earn a total of 92.00 from holding GRIFFIN MINING LTD or generate 115.0% 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. Japan Tobacco
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Japan Tobacco |
GRIFFIN MINING and Japan Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Japan Tobacco
The main advantage of trading using opposite GRIFFIN MINING and Japan Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Japan Tobacco 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 Japan Tobacco will offset losses from the drop in Japan Tobacco's 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 |
| Japan Tobacco vs. British American Tobacco | Japan Tobacco vs. JAPAN TOBACCO UNSPADR12 | Japan Tobacco vs. Superior Plus Corp | Japan Tobacco vs. NMI Holdings |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |