Correlation Between Gryphon Digital and Exchange Bankshares

Can any of the company-specific risk be diversified away by investing in both Gryphon Digital and Exchange Bankshares 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 Gryphon Digital and Exchange Bankshares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gryphon Digital Mining and Exchange Bankshares, you can compare the effects of market volatilities on Gryphon Digital and Exchange Bankshares 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 Gryphon Digital with a short position of Exchange Bankshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gryphon Digital and Exchange Bankshares.

Diversification Opportunities for Gryphon Digital and Exchange Bankshares

-0.48

Correlation Coefficient

Gryphon Digital  Exchange Bankshares

Very good diversification

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

Pair Corralation between Gryphon Digital and Exchange Bankshares

Given the investment horizon of 90 days Gryphon Digital Mining is expected to under-perform the Exchange Bankshares. In addition to that, Gryphon Digital is 5.55 times more volatile than Exchange Bankshares. It trades about -0.06 of its total potential returns per unit of risk. Exchange Bankshares is currently generating about 0.11 per unit of volatility. If you would invest  3,980  in Exchange Bankshares on October 10, 2024 and sell it today you would earn a total of  810.00  from holding Exchange Bankshares or generate 20.35% return on investment over 90 days.

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

Gryphon Digital Mining  vs.  Exchange Bankshares

Gryphon Digital Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gryphon Digital Mining has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Gryphon Digital is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Exchange Bankshares

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Exchange Bankshares are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak fundamental indicators, Exchange Bankshares demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gryphon Digital and Exchange Bankshares

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

The idea behind Gryphon Digital Mining and Exchange Bankshares 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.