Correlation Between GRIFFIN MINING and Arch Capital
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Arch Capital 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 Arch Capital 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 Arch Capital Group, you can compare the effects of market volatilities on GRIFFIN MINING and Arch Capital 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 Arch Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Arch Capital.
Diversification Opportunities for GRIFFIN MINING and Arch Capital
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GRIFFIN and Arch is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Arch Capital Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arch Capital Group 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 Arch Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arch Capital Group has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Arch Capital go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and Arch Capital
Assuming the 90 days horizon GRIFFIN MINING is expected to generate 16.6 times less return on investment than Arch Capital. But when comparing it to its historical volatility, GRIFFIN MINING LTD is 1.35 times less risky than Arch Capital. It trades about 0.02 of its potential returns per unit of risk. Arch Capital Group is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 8,254 in Arch Capital Group on September 3, 2024 and sell it today you would earn a total of 1,223 from holding Arch Capital Group or generate 14.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GRIFFIN MINING LTD vs. Arch Capital Group
Performance |
| Timeline |
| GRIFFIN MINING LTD |
| Arch Capital Group |
GRIFFIN MINING and Arch Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GRIFFIN MINING and Arch Capital
The main advantage of trading using opposite GRIFFIN MINING and Arch Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Arch Capital 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 Arch Capital will offset losses from the drop in Arch Capital's long position.| GRIFFIN MINING vs. Cardinal Health | GRIFFIN MINING vs. ALERION CLEANPOWER | GRIFFIN MINING vs. Clean Energy Fuels | GRIFFIN MINING vs. FEMALE HEALTH |
| Arch Capital vs. Berkshire Hathaway | Arch Capital vs. Berkshire Hathaway | Arch Capital vs. Superior Plus Corp | Arch Capital 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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