Correlation Between GRIFFIN MINING and Everest

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

Diversification Opportunities for GRIFFIN MINING and Everest

0.24

Correlation Coefficient

GRIFFIN MINING  Everest

Modest diversification

The 3 months correlation between GRIFFIN and Everest is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Everest Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Everest Group 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 Everest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Everest Group has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Everest go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Everest

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.24 times more return on investment than Everest. However, GRIFFIN MINING is 1.24 times more volatile than Everest Group. It trades about 0.08 of its potential returns per unit of risk. Everest Group is currently generating about 0.03 per unit of risk. If you would invest  91.00  in GRIFFIN MINING LTD on October 11, 2024 and sell it today you would earn a total of  92.00  from holding GRIFFIN MINING LTD or generate 101.1% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  Everest Group

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.

Everest Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with GRIFFIN MINING and Everest

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

The idea behind GRIFFIN MINING LTD and Everest Group 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.