Correlation Between GRIFFIN MINING and CosmoSteel Holdings
Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and CosmoSteel Holdings 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 CosmoSteel Holdings 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 CosmoSteel Holdings Limited, you can compare the effects of market volatilities on GRIFFIN MINING and CosmoSteel Holdings 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 CosmoSteel Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and CosmoSteel Holdings.
Diversification Opportunities for GRIFFIN MINING and CosmoSteel Holdings
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GRIFFIN and CosmoSteel is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and CosmoSteel Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CosmoSteel Holdings 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 CosmoSteel Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CosmoSteel Holdings has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and CosmoSteel Holdings go up and down completely randomly.
Pair Corralation between GRIFFIN MINING and CosmoSteel Holdings
Assuming the 90 days horizon GRIFFIN MINING is expected to generate 7.74 times less return on investment than CosmoSteel Holdings. But when comparing it to its historical volatility, GRIFFIN MINING LTD is 1.64 times less risky than CosmoSteel Holdings. It trades about 0.02 of its potential returns per unit of risk. CosmoSteel Holdings Limited is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 6.10 in CosmoSteel Holdings Limited on September 17, 2024 and sell it today you would earn a total of 1.00 from holding CosmoSteel Holdings Limited or generate 16.39% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GRIFFIN MINING LTD vs. CosmoSteel Holdings Limited
Performance |
Timeline |
GRIFFIN MINING LTD |
CosmoSteel Holdings |
GRIFFIN MINING and CosmoSteel Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GRIFFIN MINING and CosmoSteel Holdings
The main advantage of trading using opposite GRIFFIN MINING and CosmoSteel Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, CosmoSteel Holdings 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 CosmoSteel Holdings will offset losses from the drop in CosmoSteel Holdings' long position.GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc | GRIFFIN MINING vs. Apple Inc |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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