Correlation Between Thyssenkrupp and GRIFFIN MINING
Can any of the company-specific risk be diversified away by investing in both Thyssenkrupp 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 Thyssenkrupp and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between thyssenkrupp AG and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Thyssenkrupp 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 Thyssenkrupp with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thyssenkrupp and GRIFFIN MINING.
Diversification Opportunities for Thyssenkrupp and GRIFFIN MINING
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Thyssenkrupp and GRIFFIN is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding thyssenkrupp AG 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 Thyssenkrupp 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 thyssenkrupp AG 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 Thyssenkrupp i.e., Thyssenkrupp and GRIFFIN MINING go up and down completely randomly.
Pair Corralation between Thyssenkrupp and GRIFFIN MINING
Assuming the 90 days trading horizon thyssenkrupp AG is expected to generate 1.74 times more return on investment than GRIFFIN MINING. However, Thyssenkrupp is 1.74 times more volatile than GRIFFIN MINING LTD. It trades about 0.07 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.08 per unit of risk. If you would invest 374.00 in thyssenkrupp AG on September 20, 2024 and sell it today you would earn a total of 14.00 from holding thyssenkrupp AG or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
thyssenkrupp AG vs. GRIFFIN MINING LTD
Performance |
| Timeline |
| thyssenkrupp AG |
| GRIFFIN MINING LTD |
Thyssenkrupp and GRIFFIN MINING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thyssenkrupp and GRIFFIN MINING
The main advantage of trading using opposite Thyssenkrupp and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thyssenkrupp 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.| Thyssenkrupp vs. GRIFFIN MINING LTD | Thyssenkrupp vs. Burlington Stores | Thyssenkrupp vs. Fast Retailing Co | Thyssenkrupp vs. Retail Estates NV |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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