Correlation Between GRIFFIN MINING and Mitsui Mining

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

Diversification Opportunities for GRIFFIN MINING and Mitsui Mining

-0.48

Correlation Coefficient

GRIFFIN MINING  Mitsui Mining

Very good diversification

The 3 months correlation between GRIFFIN and Mitsui is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Mitsui Mining Smelting in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitsui Mining Smelting 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 Mitsui Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitsui Mining Smelting has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Mitsui Mining go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Mitsui Mining

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 1.47 times more return on investment than Mitsui Mining. However, GRIFFIN MINING is 1.47 times more volatile than Mitsui Mining Smelting. It trades about 0.14 of its potential returns per unit of risk. Mitsui Mining Smelting is currently generating about 0.0 per unit of risk. If you would invest  174.00  in GRIFFIN MINING LTD on December 21, 2024 and sell it today you would earn a total of  40.00  from holding GRIFFIN MINING LTD or generate 22.99% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  Mitsui Mining Smelting

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 fragile basic indicators, GRIFFIN MINING reported solid returns over the last few months and may actually be approaching a breakup point.

Mitsui Mining Smelting

Risk-Adjusted Performance

Very Weak

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

Pair Trading with GRIFFIN MINING and Mitsui Mining

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

The idea behind GRIFFIN MINING LTD and Mitsui Mining Smelting 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.