Correlation Between GRIFFIN MINING and Mohawk Industries
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Mohawk Industries 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 Mohawk Industries 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 Mohawk Industries, you can compare the effects of market volatilities on GRIFFIN MINING and Mohawk Industries 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 Mohawk Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Mohawk Industries.
Diversification Opportunities for GRIFFIN MINING and Mohawk Industries
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GRIFFIN and Mohawk is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Mohawk Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mohawk Industries 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 Mohawk Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mohawk Industries has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Mohawk Industries go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Mohawk Industries
Assuming the 90 days horizon GRIFFIN MINING is expected to generate 8.32 times less return on investment than Mohawk Industries. But when comparing it to its historical volatility, GRIFFIN MINING LTD is 1.75 times less risky than Mohawk Industries. It trades about 0.02 of its potential returns per unit of risk. Mohawk Industries is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 12,200 in Mohawk Industries on September 3, 2024 and sell it today you would earn a total of 800.00 from holding Mohawk Industries or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Mohawk Industries
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Mohawk Industries |
GRIFFIN MINING and Mohawk Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Mohawk Industries
The main advantage of trading using opposite GRIFFIN MINING and Mohawk Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Mohawk Industries 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 Mohawk Industries will offset losses from the drop in Mohawk Industries' long position.| GRIFFIN MINING vs. Cardinal Health | GRIFFIN MINING vs. ALERION CLEANPOWER | GRIFFIN MINING vs. Clean Energy Fuels | GRIFFIN MINING vs. FEMALE HEALTH |
| Mohawk Industries vs. CVS Health | Mohawk Industries vs. GRIFFIN MINING LTD | Mohawk Industries vs. Addus HomeCare | Mohawk Industries vs. GALENA 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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