Correlation Between GRIN and Tellor

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

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

Diversification Opportunities for GRIN and Tellor

0.81

Correlation Coefficient

GRIN  Tellor

Very poor diversification

The 3 months correlation between GRIN and Tellor is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding GRIN and Tellor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tellor and GRIN 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 GRIN are associated (or correlated) with Tellor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tellor has no effect on the direction of GRIN i.e., GRIN and Tellor go up and down completely randomly.

Pair Corralation between GRIN and Tellor

Assuming the 90 days trading horizon GRIN is expected to generate 0.83 times more return on investment than Tellor. However, GRIN is 1.2 times less risky than Tellor. It trades about -0.12 of its potential returns per unit of risk. Tellor is currently generating about -0.1 per unit of risk. If you would invest  8.32  in GRIN on January 24, 2024 and sell it today you would lose (3.35) from holding GRIN or give up 40.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.46%
Values	Daily Returns

GRIN  vs.  Tellor

GRIN

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for GRIN shareholders.

Tellor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tellor has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental drivers remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for Tellor shareholders.

Pair Trading with GRIN and Tellor

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

The idea behind GRIN and Tellor 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.