Correlation Between GRIFFIN MINING and Reinsurance Group

Can any of the company-specific risk be diversified away by investing in both GRIFFIN MINING and Reinsurance Group 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 Reinsurance Group 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 Reinsurance Group of, you can compare the effects of market volatilities on GRIFFIN MINING and Reinsurance Group 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 Reinsurance Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Reinsurance Group.

Diversification Opportunities for GRIFFIN MINING and Reinsurance Group

-0.43

Correlation Coefficient

GRIFFIN MINING  Reinsurance Group

Very good diversification

The 3 months correlation between GRIFFIN and Reinsurance is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Reinsurance Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reinsurance Group 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 Reinsurance Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reinsurance Group has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Reinsurance Group go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Reinsurance Group

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to under-perform the Reinsurance Group. But the stock apears to be less risky and, when comparing its historical volatility, GRIFFIN MINING LTD is 1.32 times less risky than Reinsurance Group. The stock trades about -0.08 of its potential returns per unit of risk. The Reinsurance Group of is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  19,116  in Reinsurance Group of on September 29, 2024 and sell it today you would earn a total of  1,084  from holding Reinsurance Group of or generate 5.67% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  Reinsurance Group of

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIFFIN MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Reinsurance Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Reinsurance Group of are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Reinsurance Group may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with GRIFFIN MINING and Reinsurance Group

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

The idea behind GRIFFIN MINING LTD and Reinsurance Group of 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..