Correlation Between Wayside Technology and GRIFFIN MINING

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

Diversification Opportunities for Wayside Technology and GRIFFIN MINING

-0.17

Correlation Coefficient

Wayside Technology  GRIFFIN MINING

Good diversification

The 3 months correlation between Wayside and GRIFFIN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Wayside Technology Group and GRIFFIN MINING LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GRIFFIN MINING LTD and Wayside 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 Wayside Technology Group 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 LTD has no effect on the direction of Wayside Technology i.e., Wayside Technology and GRIFFIN MINING go up and down completely randomly.

Pair Corralation between Wayside Technology and GRIFFIN MINING

Assuming the 90 days horizon Wayside Technology Group is expected to generate 1.49 times more return on investment than GRIFFIN MINING. However, Wayside Technology is 1.49 times more volatile than GRIFFIN MINING LTD. It trades about 0.2 of its potential returns per unit of risk. GRIFFIN MINING LTD is currently generating about 0.03 per unit of risk. If you would invest  8,488  in Wayside Technology Group on September 1, 2024 and sell it today you would earn a total of  4,112  from holding Wayside Technology Group or generate 48.44% return on investment over 90 days.

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

Wayside Technology Group  vs.  GRIFFIN MINING LTD

Wayside Technology

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wayside Technology Group are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Wayside Technology reported solid returns over the last few months and may actually be approaching a breakup point.

GRIFFIN MINING LTD

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GRIFFIN MINING LTD are ranked lower than 2 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Wayside Technology and GRIFFIN MINING

The main advantage of trading using opposite Wayside Technology and GRIFFIN MINING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wayside 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 Wayside Technology Group and GRIFFIN MINING LTD 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.