Correlation Between H FARM and GRIFFIN MINING

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

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

Diversification Opportunities for H FARM and GRIFFIN MINING

0.63

Correlation Coefficient

H FARM  GRIFFIN MINING

Poor diversification

The 3 months correlation between 5JQ and GRIFFIN is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA 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 H FARM 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 H FARM SPA 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 H FARM i.e., H FARM and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between H FARM and GRIFFIN MINING

Assuming the 90 days horizon H FARM is expected to generate 35.29 times less return on investment than GRIFFIN MINING. In addition to that, H FARM is 2.22 times more volatile than GRIFFIN MINING LTD. It trades about 0.0 of its total potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.08 per unit of volatility. If you would invest  79.00  in GRIFFIN MINING LTD on September 26, 2024 and sell it today you would earn a total of  95.00  from holding GRIFFIN MINING LTD or generate 120.25% return on investment over 90 days.

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

H FARM SPA  vs.  GRIFFIN MINING LTD

H FARM SPA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days H FARM SPA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

GRIFFIN MINING LTD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRIFFIN MINING LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 H FARM and GRIFFIN MINING

The main advantage of trading using opposite H FARM and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM 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 H FARM SPA 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.