Correlation Between Nippon Steel and GRIFFIN MINING
Can any of the company-specific risk be diversified away by investing in both Nippon Steel 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 Nippon Steel and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nippon Steel and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Nippon Steel 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 Nippon Steel with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nippon Steel and GRIFFIN MINING.
Diversification Opportunities for Nippon Steel and GRIFFIN MINING
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nippon and GRIFFIN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Nippon Steel 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 Nippon Steel 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 Nippon Steel 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 Nippon Steel i.e., Nippon Steel and GRIFFIN MINING go up and down completely randomly.
Pair Corralation between Nippon Steel and GRIFFIN MINING
Assuming the 90 days trading horizon Nippon Steel is expected to generate 0.94 times more return on investment than GRIFFIN MINING. However, Nippon Steel is 1.06 times less risky than GRIFFIN MINING. It trades about 0.03 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.05 per unit of risk. If you would invest 1,880 in Nippon Steel on September 14, 2024 and sell it today you would earn a total of 13.00 from holding Nippon Steel or generate 0.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nippon Steel vs. GRIFFIN MINING LTD
Performance |
| Timeline |
| Nippon Steel |
| GRIFFIN MINING LTD |
Nippon Steel and GRIFFIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nippon Steel and GRIFFIN MINING
The main advantage of trading using opposite Nippon Steel and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nippon Steel 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.| Nippon Steel vs. Cars Inc | Nippon Steel vs. Motorcar Parts of | Nippon Steel vs. GRUPO CARSO A1 | Nippon Steel vs. CARSALESCOM |
| 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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