Correlation Between Griffin Mining and ONEOK

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

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

Diversification Opportunities for Griffin Mining and ONEOK

-0.61

Correlation Coefficient

Griffin Mining  ONEOK

Excellent diversification

The 3 months correlation between Griffin and ONEOK is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and ONEOK Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ONEOK Inc and Griffin Mining 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 Griffin Mining are associated (or correlated) with ONEOK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ONEOK Inc has no effect on the direction of Griffin Mining i.e., Griffin Mining and ONEOK go up and down completely randomly.

Pair Corralation between Griffin Mining and ONEOK

Assuming the 90 days trading horizon Griffin Mining is expected to generate 1.43 times more return on investment than ONEOK. However, Griffin Mining is 1.43 times more volatile than ONEOK Inc. It trades about 0.15 of its potential returns per unit of risk. ONEOK Inc is currently generating about 0.01 per unit of risk. If you would invest  14,600  in Griffin Mining on December 22, 2024 and sell it today you would earn a total of  3,700  from holding Griffin Mining or generate 25.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	96.83%
Values	Daily Returns

Griffin Mining  vs.  ONEOK Inc

Griffin Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining are ranked lower than 11 (%) 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.

ONEOK Inc

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Griffin Mining and ONEOK

The main advantage of trading using opposite Griffin Mining and ONEOK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffin Mining position performs unexpectedly, ONEOK 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 ONEOK will offset losses from the drop in ONEOK's long position.

The idea behind Griffin Mining and ONEOK Inc 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.