Correlation Between GRIFFIN MINING and MACOM Technology

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

Diversification Opportunities for GRIFFIN MINING and MACOM Technology

0.46

Correlation Coefficient

GRIFFIN MINING  MACOM Technology

Very weak diversification

The 3 months correlation between GRIFFIN and MACOM is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and MACOM Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACOM Technology Sol 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 MACOM Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACOM Technology Sol has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and MACOM Technology go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and MACOM Technology

Assuming the 90 days horizon GRIFFIN MINING is expected to generate 2.24 times less return on investment than MACOM Technology. But when comparing it to its historical volatility, GRIFFIN MINING LTD is 1.17 times less risky than MACOM Technology. It trades about 0.19 of its potential returns per unit of risk. MACOM Technology Solutions is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  8,700  in MACOM Technology Solutions on February 13, 2025 and sell it today you would earn a total of  2,200  from holding MACOM Technology Solutions or generate 25.29% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  MACOM Technology Solutions

GRIFFIN MINING LTD

Risk-Adjusted Performance

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 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.

MACOM Technology Sol

Risk-Adjusted Performance

Very Weak

Over the last 90 days MACOM Technology Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, MACOM Technology is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with GRIFFIN MINING and MACOM Technology

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

The idea behind GRIFFIN MINING LTD and MACOM Technology Solutions 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.

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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.