Correlation Between VIVA WINE and GRIFFIN MINING
Can any of the company-specific risk be diversified away by investing in both VIVA WINE 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 VIVA WINE and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIVA WINE GROUP and GRIFFIN MINING LTD, you can compare the effects of market volatilities on VIVA WINE 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 VIVA WINE with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIVA WINE and GRIFFIN MINING.
Diversification Opportunities for VIVA WINE and GRIFFIN MINING
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between VIVA and GRIFFIN is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding VIVA WINE GROUP 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 VIVA WINE 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 VIVA WINE GROUP 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 VIVA WINE i.e., VIVA WINE and GRIFFIN MINING go up and down completely randomly.
Pair Corralation between VIVA WINE and GRIFFIN MINING
Assuming the 90 days horizon VIVA WINE GROUP is expected to under-perform the GRIFFIN MINING. In addition to that, VIVA WINE is 1.07 times more volatile than GRIFFIN MINING LTD. It trades about -0.04 of its total potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.01 per unit of volatility. If you would invest 174.00 in GRIFFIN MINING LTD on September 15, 2024 and sell it today you would lose (1.00) from holding GRIFFIN MINING LTD or give up 0.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIVA WINE GROUP vs. GRIFFIN MINING LTD
Performance |
| Timeline |
| VIVA WINE GROUP |
| GRIFFIN MINING LTD |
VIVA WINE and GRIFFIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIVA WINE and GRIFFIN MINING
The main advantage of trading using opposite VIVA WINE and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIVA WINE 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.The idea behind VIVA WINE GROUP and GRIFFIN MINING LTD pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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