Correlation Between Hycroft Mining and Grom Social
Can any of the company-specific risk be diversified away by investing in both Hycroft Mining and Grom Social 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 Hycroft Mining and Grom Social into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hycroft Mining Holding and Grom Social Enterprises, you can compare the effects of market volatilities on Hycroft Mining and Grom Social 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 Hycroft Mining with a short position of Grom Social. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hycroft Mining and Grom Social.
Diversification Opportunities for Hycroft Mining and Grom Social
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hycroft and Grom is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Hycroft Mining Holding and Grom Social Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grom Social Enterprises and Hycroft 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 Hycroft Mining Holding are associated (or correlated) with Grom Social. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grom Social Enterprises has no effect on the direction of Hycroft Mining i.e., Hycroft Mining and Grom Social go up and down completely randomly.
Pair Corralation between Hycroft Mining and Grom Social
Assuming the 90 days horizon Hycroft Mining is expected to generate 11.5 times less return on investment than Grom Social. But when comparing it to its historical volatility, Hycroft Mining Holding is 8.03 times less risky than Grom Social. It trades about 0.09 of its potential returns per unit of risk. Grom Social Enterprises is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 499.00 in Grom Social Enterprises on October 25, 2024 and sell it today you would lose (498.00) from holding Grom Social Enterprises or give up 99.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 38.74% |
| Values | Daily Returns |
Hycroft Mining Holding vs. Grom Social Enterprises
Performance |
| Timeline |
| Hycroft Mining Holding |
| Grom Social Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hycroft Mining and Grom Social Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hycroft Mining and Grom Social
The main advantage of trading using opposite Hycroft Mining and Grom Social positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hycroft Mining position performs unexpectedly, Grom Social 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 Grom Social will offset losses from the drop in Grom Social's long position.| Hycroft Mining vs. Hycroft Mining Holding | Hycroft Mining vs. Hycroft Mining Holding | Hycroft Mining vs. Hall of Fame |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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