Correlation Between Rmy Cointreau and GRIFFIN MINING

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

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

Diversification Opportunities for Rmy Cointreau and GRIFFIN MINING

0.6

Correlation Coefficient

Rmy Cointreau  GRIFFIN MINING

Poor diversification

The 3 months correlation between Rmy and GRIFFIN is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Rmy Cointreau SA 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 Rmy Cointreau 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 Rmy Cointreau SA 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 Rmy Cointreau i.e., Rmy Cointreau and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Rmy Cointreau and GRIFFIN MINING

Assuming the 90 days horizon Rmy Cointreau SA is expected to generate 1.1 times more return on investment than GRIFFIN MINING. However, Rmy Cointreau is 1.1 times more volatile than GRIFFIN MINING LTD. It trades about 0.03 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  6,255  in Rmy Cointreau SA on September 15, 2024 and sell it today you would earn a total of  190.00  from holding Rmy Cointreau SA or generate 3.04% return on investment over 90 days.

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

Rmy Cointreau SA  vs.  GRIFFIN MINING LTD

Rmy Cointreau SA

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Rmy Cointreau SA are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Rmy Cointreau 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 Rmy Cointreau and GRIFFIN MINING

The main advantage of trading using opposite Rmy Cointreau and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rmy Cointreau 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 Rmy Cointreau SA 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.