Correlation Between GRIFFIN MINING and DNB BANK

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

Diversification Opportunities for GRIFFIN MINING and DNB BANK

0.79

Correlation Coefficient

GRIFFIN MINING  DNB BANK

Poor diversification

The 3 months correlation between GRIFFIN and DNB is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and DNB BANK ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DNB BANK ASA 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 DNB BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DNB BANK ASA has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and DNB BANK go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and DNB BANK

Assuming the 90 days horizon GRIFFIN MINING is expected to generate 1.05 times less return on investment than DNB BANK. In addition to that, GRIFFIN MINING is 1.71 times more volatile than DNB BANK ASA. It trades about 0.14 of its total potential returns per unit of risk. DNB BANK ASA is currently generating about 0.25 per unit of volatility. If you would invest  1,873  in DNB BANK ASA on December 20, 2024 and sell it today you would earn a total of  500.00  from holding DNB BANK ASA or generate 26.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

GRIFFIN MINING LTD  vs.  DNB BANK ASA

GRIFFIN MINING LTD

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GRIFFIN MINING LTD are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, GRIFFIN MINING reported solid returns over the last few months and may actually be approaching a breakup point.

DNB BANK ASA

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DNB BANK ASA are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, DNB BANK reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRIFFIN MINING and DNB BANK

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

The idea behind GRIFFIN MINING LTD and DNB BANK ASA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.