Correlation Between Griffin Mining and Schroders Investment

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

By analyzing existing cross correlation between Griffin Mining and Schroders Investment Trusts, you can compare the effects of market volatilities on Griffin Mining and Schroders Investment 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 Schroders Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffin Mining and Schroders Investment.

Diversification Opportunities for Griffin Mining and Schroders Investment

-0.34

Correlation Coefficient

Griffin Mining  Schroders Investment

Very good diversification

The 3 months correlation between Griffin and Schroders is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Griffin Mining and Schroders Investment Trusts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders Investment 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 Schroders Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders Investment has no effect on the direction of Griffin Mining i.e., Griffin Mining and Schroders Investment go up and down completely randomly.

Pair Corralation between Griffin Mining and Schroders Investment

Assuming the 90 days trading horizon Griffin Mining is expected to generate 3.1 times more return on investment than Schroders Investment. However, Griffin Mining is 3.1 times more volatile than Schroders Investment Trusts. It trades about 0.15 of its potential returns per unit of risk. Schroders Investment Trusts is currently generating about -0.02 per unit of risk. If you would invest  14,700  in Griffin Mining on December 25, 2024 and sell it today you would earn a total of  3,800  from holding Griffin Mining or generate 25.85% return on investment over 90 days.

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

Griffin Mining  vs.  Schroders Investment Trusts

Griffin Mining

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining are ranked lower than 12 (%) 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.

Schroders Investment

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Griffin Mining and Schroders Investment

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

The idea behind Griffin Mining and Schroders Investment Trusts 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.