Correlation Between LGI Homes and GRIFFIN MINING
Can any of the company-specific risk be diversified away by investing in both LGI Homes 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 LGI Homes and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI Homes and GRIFFIN MINING LTD, you can compare the effects of market volatilities on LGI Homes 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 LGI Homes with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and GRIFFIN MINING.
Diversification Opportunities for LGI Homes and GRIFFIN MINING
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between LGI and GRIFFIN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes 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 LGI Homes 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 LGI Homes 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 LGI Homes i.e., LGI Homes and GRIFFIN MINING go up and down completely randomly.
Pair Corralation between LGI Homes and GRIFFIN MINING
Assuming the 90 days trading horizon LGI Homes is expected to generate 1.62 times more return on investment than GRIFFIN MINING. However, LGI Homes is 1.62 times more volatile than GRIFFIN MINING LTD. It trades about 0.15 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 9,550 in LGI Homes on September 5, 2024 and sell it today you would earn a total of 750.00 from holding LGI Homes or generate 7.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
LGI Homes vs. GRIFFIN MINING LTD
Performance |
| Timeline |
| LGI Homes |
| GRIFFIN MINING LTD |
LGI Homes and GRIFFIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and GRIFFIN MINING
The main advantage of trading using opposite LGI Homes and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes 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.| LGI Homes vs. BJs Wholesale Club | LGI Homes vs. ADRIATIC METALS LS 013355 | LGI Homes vs. SPARTAN STORES | LGI Homes vs. QURATE RETAIL INC |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |