Correlation Between GRIFFIN MINING and Ebro Foods

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

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

Diversification Opportunities for GRIFFIN MINING and Ebro Foods

-0.21

Correlation Coefficient

GRIFFIN MINING  Ebro Foods

Very good diversification

The 3 months correlation between GRIFFIN and Ebro is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Ebro Foods SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ebro Foods SA and GRIFFIN MINING 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 GRIFFIN MINING LTD are associated (or correlated) with Ebro Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ebro Foods SA has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Ebro Foods go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Ebro Foods

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to generate 2.16 times more return on investment than Ebro Foods. However, GRIFFIN MINING is 2.16 times more volatile than Ebro Foods SA. It trades about 0.05 of its potential returns per unit of risk. Ebro Foods SA is currently generating about -0.11 per unit of risk. If you would invest  172.00  in GRIFFIN MINING LTD on September 25, 2024 and sell it today you would earn a total of  2.00  from holding GRIFFIN MINING LTD or generate 1.16% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  Ebro Foods SA

GRIFFIN MINING LTD

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRIFFIN MINING LTD are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, GRIFFIN MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ebro Foods SA

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ebro Foods SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Ebro Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GRIFFIN MINING and Ebro Foods

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

The idea behind GRIFFIN MINING LTD and Ebro Foods SA 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.