Correlation Between Prosafe SE and GRIFFIN MINING

Can any of the company-specific risk be diversified away by investing in both Prosafe SE 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 Prosafe SE and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prosafe SE and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Prosafe SE 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 Prosafe SE with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prosafe SE and GRIFFIN MINING.

Diversification Opportunities for Prosafe SE and GRIFFIN MINING

0.51

Correlation Coefficient

Prosafe SE  GRIFFIN MINING

Very weak diversification

The 3 months correlation between Prosafe and GRIFFIN is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Prosafe SE 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 Prosafe SE 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 Prosafe SE 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 Prosafe SE i.e., Prosafe SE and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Prosafe SE and GRIFFIN MINING

Assuming the 90 days horizon Prosafe SE is expected to under-perform the GRIFFIN MINING. In addition to that, Prosafe SE is 3.45 times more volatile than GRIFFIN MINING LTD. It trades about -0.13 of its total potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.0 per unit of volatility. If you would invest  178.00  in GRIFFIN MINING LTD on September 23, 2024 and sell it today you would lose (4.00) from holding GRIFFIN MINING LTD or give up 2.25% of portfolio value over 90 days.

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

Prosafe SE  vs.  GRIFFIN MINING LTD

Prosafe SE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prosafe SE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIFFIN MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GRIFFIN MINING is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Prosafe SE and GRIFFIN MINING

The main advantage of trading using opposite Prosafe SE and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prosafe SE 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 Prosafe SE and GRIFFIN MINING LTD 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.