Correlation Between Dassault Aviation and Griffin Mining

Can any of the company-specific risk be diversified away by investing in both Dassault Aviation 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 Dassault Aviation and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Dassault Aviation and Griffin Mining

-0.35

Correlation Coefficient

Dassault Aviation  Griffin Mining

Very good diversification

The 3 months correlation between Dassault and Griffin is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Dassault Aviation SA and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Dassault Aviation 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 Dassault Aviation 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 has no effect on the direction of Dassault Aviation i.e., Dassault Aviation and Griffin Mining go up and down completely randomly.

Pair Corralation between Dassault Aviation and Griffin Mining

Assuming the 90 days trading horizon Dassault Aviation SA is expected to under-perform the Griffin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Dassault Aviation SA is 1.71 times less risky than Griffin Mining. The stock trades about -0.04 of its potential returns per unit of risk. The Griffin Mining is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  14,400  in Griffin Mining on September 20, 2024 and sell it today you would earn a total of  400.00  from holding Griffin Mining or generate 2.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Dassault Aviation SA  vs.  Griffin Mining

Dassault Aviation

Risk-Adjusted Performance

0 of 100

Very Weak

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

Griffin Mining

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Griffin Mining has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Griffin Mining is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Dassault Aviation and Griffin Mining

The main advantage of trading using opposite Dassault Aviation and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dassault Aviation 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 Dassault Aviation SA and Griffin Mining 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..