Correlation Between MEDICAL FACILITIES and Griffon
Can any of the company-specific risk be diversified away by investing in both MEDICAL FACILITIES and Griffon 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 MEDICAL FACILITIES and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEDICAL FACILITIES NEW and Griffon, you can compare the effects of market volatilities on MEDICAL FACILITIES and Griffon 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 MEDICAL FACILITIES with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEDICAL FACILITIES and Griffon.
Diversification Opportunities for MEDICAL FACILITIES and Griffon
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEDICAL and Griffon is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding MEDICAL FACILITIES NEW and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and MEDICAL FACILITIES 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 MEDICAL FACILITIES NEW are associated (or correlated) with Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of MEDICAL FACILITIES i.e., MEDICAL FACILITIES and Griffon go up and down completely randomly.
Pair Corralation between MEDICAL FACILITIES and Griffon
Assuming the 90 days horizon MEDICAL FACILITIES is expected to generate 1.05 times less return on investment than Griffon. In addition to that, MEDICAL FACILITIES is 1.03 times more volatile than Griffon. It trades about 0.07 of its total potential returns per unit of risk. Griffon is currently generating about 0.08 per unit of volatility. If you would invest 3,294 in Griffon on September 19, 2024 and sell it today you would earn a total of 4,156 from holding Griffon or generate 126.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEDICAL FACILITIES NEW vs. Griffon
Performance |
| Timeline |
| MEDICAL FACILITIES NEW |
| Griffon |
MEDICAL FACILITIES and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEDICAL FACILITIES and Griffon
The main advantage of trading using opposite MEDICAL FACILITIES and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEDICAL FACILITIES position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| MEDICAL FACILITIES vs. Ramsay Health Care | MEDICAL FACILITIES vs. Universal Health Services | MEDICAL FACILITIES vs. Superior Plus Corp | MEDICAL FACILITIES vs. SIVERS SEMICONDUCTORS AB |
| Griffon vs. 24SEVENOFFICE GROUP AB | Griffon vs. Seven West Media | Griffon vs. MEDICAL FACILITIES NEW | Griffon vs. Flutter Entertainment PLC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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