Correlation Between Takeda Pharmaceutical and GRIFFIN MINING

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

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

Diversification Opportunities for Takeda Pharmaceutical and GRIFFIN MINING

0.13

Correlation Coefficient

Takeda Pharmaceutical  GRIFFIN MINING

Average diversification

The 3 months correlation between Takeda and GRIFFIN is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Takeda Pharmaceutical 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 Takeda Pharmaceutical 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 Takeda Pharmaceutical 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 Takeda Pharmaceutical i.e., Takeda Pharmaceutical and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Takeda Pharmaceutical and GRIFFIN MINING

Assuming the 90 days trading horizon Takeda Pharmaceutical is expected to generate 0.61 times more return on investment than GRIFFIN MINING. However, Takeda Pharmaceutical is 1.64 times less risky than GRIFFIN MINING. It trades about -0.01 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about -0.02 per unit of risk. If you would invest  1,300  in Takeda Pharmaceutical on September 14, 2024 and sell it today you would lose (20.00) from holding Takeda Pharmaceutical or give up 1.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.31%
Values	Daily Returns

Takeda Pharmaceutical  vs.  GRIFFIN MINING LTD

Takeda Pharmaceutical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Takeda Pharmaceutical has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Takeda Pharmaceutical is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

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 Takeda Pharmaceutical and GRIFFIN MINING

The main advantage of trading using opposite Takeda Pharmaceutical and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Takeda Pharmaceutical 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 Takeda Pharmaceutical 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.