Correlation Between GRIFFIN MINING and Tencent Music

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

Diversification Opportunities for GRIFFIN MINING and Tencent Music

0.22
  Correlation Coefficient

Modest diversification

The 3 months correlation between GRIFFIN and Tencent is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Tencent Music Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tencent Music Entert 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 Tencent Music. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tencent Music Entert has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Tencent Music go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Tencent Music

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 0.68 times more return on investment than Tencent Music. However, GRIFFIN MINING LTD is 1.47 times less risky than Tencent Music. It trades about 0.06 of its potential returns per unit of risk. Tencent Music Entertainment is currently generating about 0.03 per unit of risk. If you would invest  99.00  in GRIFFIN MINING LTD on October 23, 2024 and sell it today you would earn a total of  72.00  from holding GRIFFIN MINING LTD or generate 72.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

GRIFFIN MINING LTD  vs.  Tencent Music Entertainment

 Performance 
       Timeline  
GRIFFIN MINING LTD 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 current stock price disturbance, may contribute to mid-run losses for the stockholders.
Tencent Music Entert 

Risk-Adjusted Performance

0 of 100

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

GRIFFIN MINING and Tencent Music Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GRIFFIN MINING and Tencent Music

The main advantage of trading using opposite GRIFFIN MINING and Tencent Music positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Tencent Music 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 Tencent Music will offset losses from the drop in Tencent Music's long position.
The idea behind GRIFFIN MINING LTD and Tencent Music Entertainment 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 Stocks Directory module to find actively traded stocks across global markets.

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