Correlation Between GRIFFIN MINING and Newtek Business

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

By analyzing existing cross correlation between GRIFFIN MINING LTD and Newtek Business Services, you can compare the effects of market volatilities on GRIFFIN MINING and Newtek Business 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 Newtek Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Newtek Business.

Diversification Opportunities for GRIFFIN MINING and Newtek Business

-0.6

Correlation Coefficient

GRIFFIN MINING  Newtek Business

Excellent diversification

The 3 months correlation between GRIFFIN and Newtek is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Newtek Business Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newtek Business Services 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 LTD are associated (or correlated) with Newtek Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newtek Business Services has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Newtek Business go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Newtek Business

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 0.78 times more return on investment than Newtek Business. However, GRIFFIN MINING LTD is 1.28 times less risky than Newtek Business. It trades about 0.09 of its potential returns per unit of risk. Newtek Business Services is currently generating about 0.01 per unit of risk. If you would invest  103.00  in GRIFFIN MINING LTD on October 5, 2024 and sell it today you would earn a total of  69.00  from holding GRIFFIN MINING LTD or generate 66.99% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  Newtek Business Services

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 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.

Newtek Business Services

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GRIFFIN MINING and Newtek Business

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

The idea behind GRIFFIN MINING LTD and Newtek Business Services 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.