Correlation Between Metals Exploration and Griffin Mining
Can any of the company-specific risk be diversified away by investing in both Metals Exploration 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 Metals Exploration and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metals Exploration Plc and Griffin Mining, you can compare the effects of market volatilities on Metals Exploration 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 Metals Exploration with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metals Exploration and Griffin Mining.
Diversification Opportunities for Metals Exploration and Griffin Mining
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Metals and Griffin is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Metals Exploration Plc and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Metals Exploration 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 Metals Exploration Plc 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 has no effect on the direction of Metals Exploration i.e., Metals Exploration and Griffin Mining go up and down completely randomly.
Pair Corralation between Metals Exploration and Griffin Mining
Assuming the 90 days trading horizon Metals Exploration Plc is expected to generate 1.96 times more return on investment than Griffin Mining. However, Metals Exploration is 1.96 times more volatile than Griffin Mining. It trades about 0.1 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.08 per unit of risk. If you would invest 170.00 in Metals Exploration Plc on September 2, 2024 and sell it today you would earn a total of 400.00 from holding Metals Exploration Plc or generate 235.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Metals Exploration Plc vs. Griffin Mining
Performance |
| Timeline |
| Metals Exploration Plc |
| Griffin Mining |
Metals Exploration and Griffin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metals Exploration and Griffin Mining
The main advantage of trading using opposite Metals Exploration and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metals Exploration 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.| Metals Exploration vs. Bankers Investment Trust | Metals Exploration vs. New Residential Investment | Metals Exploration vs. Oakley Capital Investments | Metals Exploration vs. Sydbank |
| Griffin Mining vs. DXC Technology Co | Griffin Mining vs. Auction Technology Group | Griffin Mining vs. Zoom Video Communications | Griffin Mining vs. Spotify Technology SA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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