Correlation Between BE Semiconductor and Griffin Mining

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

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

Diversification Opportunities for BE Semiconductor and Griffin Mining

-0.54

Correlation Coefficient

BE Semiconductor  Griffin Mining

Excellent diversification

The 3 months correlation between 0XVE and Griffin is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding BE Semiconductor Industries and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and BE Semiconductor 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 BE Semiconductor Industries 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 BE Semiconductor i.e., BE Semiconductor and Griffin Mining go up and down completely randomly.

Pair Corralation between BE Semiconductor and Griffin Mining

Assuming the 90 days trading horizon BE Semiconductor Industries is expected to under-perform the Griffin Mining. But the stock apears to be less risky and, when comparing its historical volatility, BE Semiconductor Industries is 1.1 times less risky than Griffin Mining. The stock trades about -0.03 of its potential returns per unit of risk. The Griffin Mining is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  14,500  in Griffin Mining on December 2, 2024 and sell it today you would earn a total of  4,200  from holding Griffin Mining or generate 28.97% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

BE Semiconductor Industries  vs.  Griffin Mining

BE Semiconductor Ind

Risk-Adjusted Performance

Very Weak

Over the last 90 days BE Semiconductor Industries has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BE Semiconductor is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Griffin Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Griffin Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BE Semiconductor and Griffin Mining

The main advantage of trading using opposite BE Semiconductor and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BE Semiconductor 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 BE Semiconductor Industries 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.