Correlation Between GRIFFIN MINING and DAX Index

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

Diversification Opportunities for GRIFFIN MINING and DAX Index

-0.17

Correlation Coefficient

GRIFFIN MINING  DAX Index

Good diversification

The 3 months correlation between GRIFFIN and DAX is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and DAX Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAX Index 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 DAX Index. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAX Index has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and DAX Index go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and DAX Index

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 2.81 times more return on investment than DAX Index. However, GRIFFIN MINING is 2.81 times more volatile than DAX Index. It trades about 0.08 of its potential returns per unit of risk. DAX Index is currently generating about 0.07 per unit of risk. If you would invest  78.00  in GRIFFIN MINING LTD on October 4, 2024 and sell it today you would earn a total of  96.00  from holding GRIFFIN MINING LTD or generate 123.08% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  DAX Index

Pair Trading with GRIFFIN MINING and DAX Index

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

The idea behind GRIFFIN MINING LTD and DAX Index 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.