Correlation Between Automatic Data and Griffin Mining

Can any of the company-specific risk be diversified away by investing in both Automatic Data 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 Automatic Data and Griffin Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Automatic Data Processing and Griffin Mining, you can compare the effects of market volatilities on Automatic Data 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 Automatic Data with a short position of Griffin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Automatic Data and Griffin Mining.

Diversification Opportunities for Automatic Data and Griffin Mining

-0.18

Correlation Coefficient

Automatic Data  Griffin Mining

Good diversification

The 3 months correlation between Automatic and Griffin is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Automatic Data Processing and Griffin Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffin Mining and Automatic Data 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 Automatic Data Processing 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 has no effect on the direction of Automatic Data i.e., Automatic Data and Griffin Mining go up and down completely randomly.

Pair Corralation between Automatic Data and Griffin Mining

Assuming the 90 days trading horizon Automatic Data is expected to generate 1.54 times less return on investment than Griffin Mining. But when comparing it to its historical volatility, Automatic Data Processing is 1.86 times less risky than Griffin Mining. It trades about 0.13 of its potential returns per unit of risk. Griffin Mining is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  17,000  in Griffin Mining on April 8, 2025 and sell it today you would earn a total of  2,700  from holding Griffin Mining or generate 15.88% return on investment over 90 days.

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

Automatic Data Processing  vs.  Griffin Mining

Automatic Data Processing

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Automatic Data Processing are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Automatic Data may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Griffin Mining

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Griffin Mining are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Griffin Mining exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Automatic Data and Griffin Mining

The main advantage of trading using opposite Automatic Data and Griffin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Automatic Data 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 Automatic Data Processing and Griffin Mining 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.