Correlation Between GRIFFIN MINING and Pearson Plc
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Pearson 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 Pearson 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 Pearson plc, you can compare the effects of market volatilities on GRIFFIN MINING and Pearson 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 Pearson Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Pearson Plc.
Diversification Opportunities for GRIFFIN MINING and Pearson Plc
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GRIFFIN and Pearson is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Pearson plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pearson 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 Pearson Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pearson plc has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Pearson Plc go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Pearson Plc
Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.64 times more return on investment than Pearson Plc. However, GRIFFIN MINING is 1.64 times more volatile than Pearson plc. It trades about 0.08 of its potential returns per unit of risk. Pearson plc is currently generating about 0.07 per unit of risk. If you would invest 83.00 in GRIFFIN MINING LTD on September 16, 2024 and sell it today you would earn a total of 90.00 from holding GRIFFIN MINING LTD or generate 108.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Pearson plc
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Pearson plc |
GRIFFIN MINING and Pearson Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Pearson Plc
The main advantage of trading using opposite GRIFFIN MINING and Pearson Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Pearson 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 Pearson Plc will offset losses from the drop in Pearson Plc's long position.| GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
| Pearson Plc vs. Lion One Metals | Pearson Plc vs. Hyster Yale Materials Handling | Pearson Plc vs. NEWELL RUBBERMAID | Pearson Plc 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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