Correlation Between FORMPIPE SOFTWARE and GRIFFIN MINING

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

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

Diversification Opportunities for FORMPIPE SOFTWARE and GRIFFIN MINING

-0.32

Correlation Coefficient

FORMPIPE SOFTWARE  GRIFFIN MINING

Very good diversification

The 3 months correlation between FORMPIPE and GRIFFIN is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 FORMPIPE SOFTWARE i.e., FORMPIPE SOFTWARE and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between FORMPIPE SOFTWARE and GRIFFIN MINING

Assuming the 90 days horizon FORMPIPE SOFTWARE AB is expected to generate 1.54 times more return on investment than GRIFFIN MINING. However, FORMPIPE SOFTWARE is 1.54 times more volatile than GRIFFIN MINING LTD. It trades about -0.03 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.08 per unit of risk. If you would invest  207.00  in FORMPIPE SOFTWARE AB on September 30, 2024 and sell it today you would lose (14.00) from holding FORMPIPE SOFTWARE AB or give up 6.76% of portfolio value over 90 days.

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

FORMPIPE SOFTWARE AB  vs.  GRIFFIN MINING LTD

FORMPIPE SOFTWARE

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with FORMPIPE SOFTWARE and GRIFFIN MINING

The main advantage of trading using opposite FORMPIPE SOFTWARE and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FORMPIPE SOFTWARE 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 FORMPIPE SOFTWARE AB 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.