Correlation Between Highlight Communications and GRIFFIN MINING
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and GRIFFIN MINING 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 Highlight Communications and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Highlight Communications and GRIFFIN MINING 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 Highlight Communications with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and GRIFFIN MINING.
Diversification Opportunities for Highlight Communications and GRIFFIN MINING
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Highlight and GRIFFIN is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with GRIFFIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIFFIN MINING LTD has no effect on the direction of Highlight Communications i.e., Highlight Communications and GRIFFIN MINING go up and down completely randomly.
Pair Corralation between Highlight Communications and GRIFFIN MINING
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.21 times more return on investment than GRIFFIN MINING. However, Highlight Communications is 1.21 times more volatile than GRIFFIN MINING LTD. It trades about 0.19 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.02 per unit of risk. If you would invest 98.00 in Highlight Communications AG on August 29, 2024 and sell it today you would earn a total of 10.00 from holding Highlight Communications AG or generate 10.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Highlight Communications AG vs. GRIFFIN MINING LTD
Performance |
| Timeline |
| Highlight Communications |
| GRIFFIN MINING LTD |
Highlight Communications and GRIFFIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and GRIFFIN MINING
The main advantage of trading using opposite Highlight Communications and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, GRIFFIN MINING 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 GRIFFIN MINING will offset losses from the drop in GRIFFIN MINING's long position.| Highlight Communications vs. CyberArk Software | Highlight Communications vs. CAREER EDUCATION | Highlight Communications vs. ATOSS SOFTWARE | Highlight Communications vs. EMBARK EDUCATION LTD |
| GRIFFIN MINING vs. BW OFFSHORE LTD | GRIFFIN MINING vs. Eidesvik Offshore ASA | GRIFFIN MINING vs. Liberty Broadband | GRIFFIN MINING vs. Sekisui Chemical Co |
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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