Correlation Between X FAB and Griffin Mining

Can any of the company-specific risk be diversified away by investing in both X FAB 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 X FAB and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between X FAB Silicon Foundries and Griffin Mining, you can compare the effects of market volatilities on X FAB 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 X FAB with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of X FAB and Griffin Mining.

Diversification Opportunities for X FAB and Griffin Mining

0.71

Correlation Coefficient

X FAB  Griffin Mining

Poor diversification

The 3 months correlation between 0ROZ and Griffin is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding X FAB Silicon Foundries and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and X FAB 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 X FAB Silicon Foundries 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 X FAB i.e., X FAB and Griffin Mining go up and down completely randomly.

Pair Corralation between X FAB and Griffin Mining

Assuming the 90 days trading horizon X FAB is expected to generate 3.71 times less return on investment than Griffin Mining. But when comparing it to its historical volatility, X FAB Silicon Foundries is 1.05 times less risky than Griffin Mining. It trades about 0.02 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  14,500  in Griffin Mining on September 5, 2024 and sell it today you would earn a total of  500.00  from holding Griffin Mining or generate 3.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

X FAB Silicon Foundries  vs.  Griffin Mining

X FAB Silicon

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days X FAB Silicon Foundries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Griffin Mining

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Griffin Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with X FAB and Griffin Mining

The main advantage of trading using opposite X FAB and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if X FAB 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 X FAB Silicon Foundries and Griffin Mining 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.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.