Correlation Between Anglo Asian and Griffin Mining

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

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

Diversification Opportunities for Anglo Asian and Griffin Mining

0.11

Correlation Coefficient

Anglo Asian  Griffin Mining

Average diversification

The 3 months correlation between Anglo and Griffin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Anglo Asian 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 Anglo Asian Mining 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 Anglo Asian i.e., Anglo Asian and Griffin Mining go up and down completely randomly.

Pair Corralation between Anglo Asian and Griffin Mining

Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 1.78 times more return on investment than Griffin Mining. However, Anglo Asian is 1.78 times more volatile than Griffin Mining. It trades about 0.07 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.11 per unit of risk. If you would invest  6,400  in Anglo Asian Mining on October 5, 2024 and sell it today you would earn a total of  4,000  from holding Anglo Asian Mining or generate 62.5% return on investment over 90 days.

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

Anglo Asian Mining  vs.  Griffin Mining

Anglo Asian Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anglo Asian Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Griffin Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Griffin Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Griffin Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Anglo Asian and Griffin Mining

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

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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.