Correlation Between Albion Technology and Griffin Mining

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

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

Diversification Opportunities for Albion Technology and Griffin Mining

0.1

Correlation Coefficient

Albion Technology  Griffin Mining

Average diversification

The 3 months correlation between Albion and Griffin is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and Griffin Mining go up and down completely randomly.

Pair Corralation between Albion Technology and Griffin Mining

Assuming the 90 days trading horizon Albion Technology General is expected to under-perform the Griffin Mining. But the stock apears to be less risky and, when comparing its historical volatility, Albion Technology General is 2.56 times less risky than Griffin Mining. The stock trades about -0.01 of its potential returns per unit of risk. The Griffin Mining is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14,800  in Griffin Mining on September 5, 2024 and sell it today you would earn a total of  200.00  from holding Griffin Mining or generate 1.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.46%
Values	Daily Returns

Albion Technology General  vs.  Griffin Mining

Albion Technology General

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Albion Technology General has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Albion Technology 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

1 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Griffin Mining is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Albion Technology and Griffin Mining

The main advantage of trading using opposite Albion Technology and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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 Albion Technology General 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.

Check out your portfolio center.

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.