Correlation Between GRIFFIN MINING and Motorcar Parts

Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Motorcar Parts 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 Motorcar Parts 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 Motorcar Parts of, you can compare the effects of market volatilities on GRIFFIN MINING and Motorcar Parts 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 Motorcar Parts. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Motorcar Parts.

Diversification Opportunities for GRIFFIN MINING and Motorcar Parts

-0.02

Correlation Coefficient

GRIFFIN MINING  Motorcar Parts

Good diversification

The 3 months correlation between GRIFFIN and Motorcar is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Motorcar Parts of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Motorcar Parts 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 Motorcar Parts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Motorcar Parts has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Motorcar Parts go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Motorcar Parts

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 0.92 times more return on investment than Motorcar Parts. However, GRIFFIN MINING LTD is 1.08 times less risky than Motorcar Parts. It trades about 0.0 of its potential returns per unit of risk. Motorcar Parts of is currently generating about -0.1 per unit of risk. If you would invest  174.00  in GRIFFIN MINING LTD on October 24, 2024 and sell it today you would lose (2.00) from holding GRIFFIN MINING LTD or give up 1.15% of portfolio value over 90 days.

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

GRIFFIN MINING LTD  vs.  Motorcar Parts of

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Motorcar Parts

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Motorcar Parts of are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Motorcar Parts reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRIFFIN MINING and Motorcar Parts

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

The idea behind GRIFFIN MINING LTD and Motorcar Parts of 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.