Correlation Between GRIFFIN MINING and GUDANG GARAM

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

Diversification Opportunities for GRIFFIN MINING and GUDANG GARAM

-0.77

Correlation Coefficient

GRIFFIN MINING  GUDANG GARAM

Pay attention - limited upside

The 3 months correlation between GRIFFIN and GUDANG is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and GUDANG GARAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUDANG GARAM 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 GUDANG GARAM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUDANG GARAM has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and GUDANG GARAM go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and GUDANG GARAM

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.07 times more return on investment than GUDANG GARAM. However, GRIFFIN MINING is 1.07 times more volatile than GUDANG GARAM. It trades about 0.08 of its potential returns per unit of risk. GUDANG GARAM is currently generating about -0.18 per unit of risk. If you would invest  174.00  in GRIFFIN MINING LTD on December 29, 2024 and sell it today you would earn a total of  23.00  from holding GRIFFIN MINING LTD or generate 13.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

GRIFFIN MINING LTD  vs.  GUDANG GARAM

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 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, GRIFFIN MINING reported solid returns over the last few months and may actually be approaching a breakup point.

GUDANG GARAM

Risk-Adjusted Performance

Very Weak

Over the last 90 days GUDANG GARAM has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with GRIFFIN MINING and GUDANG GARAM

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

The idea behind GRIFFIN MINING LTD and GUDANG GARAM 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.