Correlation Between Transport International and GRIFFIN MINING

Can any of the company-specific risk be diversified away by investing in both Transport International and GRIFFIN 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 Transport International and GRIFFIN MINING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Transport International Holdings and GRIFFIN MINING LTD, you can compare the effects of market volatilities on Transport International and GRIFFIN 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 Transport International with a short position of GRIFFIN MINING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and GRIFFIN MINING.

Diversification Opportunities for Transport International and GRIFFIN MINING

0.47

Correlation Coefficient

Transport International  GRIFFIN MINING

Very weak diversification

The 3 months correlation between Transport and GRIFFIN is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD and Transport International 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 Transport International Holdings are associated (or correlated) with GRIFFIN MINING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GRIFFIN MINING LTD has no effect on the direction of Transport International i.e., Transport International and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Transport International and GRIFFIN MINING

Assuming the 90 days horizon Transport International Holdings is expected to generate 1.0 times more return on investment than GRIFFIN MINING. However, Transport International Holdings is 1.0 times less risky than GRIFFIN MINING. It trades about 0.04 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.01 per unit of risk. If you would invest  91.00  in Transport International Holdings on September 16, 2024 and sell it today you would earn a total of  4.00  from holding Transport International Holdings or generate 4.4% return on investment over 90 days.

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

Transport International Holdin  vs.  GRIFFIN MINING LTD

Transport International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Transport International Holdings are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Transport International is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with Transport International and GRIFFIN MINING

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

The idea behind Transport International Holdings and GRIFFIN MINING LTD 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.