Correlation Between GRIFFIN MINING and Gamma Communications

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

Diversification Opportunities for GRIFFIN MINING and Gamma Communications

GRIFFINGammaDiversified AwayGRIFFINGammaDiversified Away100%
0.53
  Correlation Coefficient

Very weak diversification

The 3 months correlation between GRIFFIN and Gamma is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Gamma Communications plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gamma Communications plc 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 Gamma Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gamma Communications plc has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Gamma Communications go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Gamma Communications

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.34 times more return on investment than Gamma Communications. However, GRIFFIN MINING is 1.34 times more volatile than Gamma Communications plc. It trades about 0.02 of its potential returns per unit of risk. Gamma Communications plc is currently generating about -0.08 per unit of risk. If you would invest  171.00  in GRIFFIN MINING LTD on September 26, 2024 and sell it today you would earn a total of  3.00  from holding GRIFFIN MINING LTD or generate 1.75% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

GRIFFIN MINING LTD  vs.  Gamma Communications plc

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -50510
JavaScript chart by amCharts 3.21.15GG7 6GC
       Timeline  
GRIFFIN MINING LTD 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in GRIFFIN MINING LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.651.71.751.81.851.91.95
Gamma Communications plc 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Gamma Communications plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec18.418.618.81919.219.419.619.820

GRIFFIN MINING and Gamma Communications Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.14-2.36-1.57-0.78-0.01310.751.532.323.13.89 0.050.100.15
JavaScript chart by amCharts 3.21.15GG7 6GC
       Returns  

Pair Trading with GRIFFIN MINING and Gamma Communications

The main advantage of trading using opposite GRIFFIN MINING and Gamma Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Gamma Communications 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 Gamma Communications will offset losses from the drop in Gamma Communications' long position.
The idea behind GRIFFIN MINING LTD and Gamma Communications plc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.

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