Correlation Between Astar and Griffon
Can any of the company-specific risk be diversified away by investing in both Astar 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 Astar and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Griffon, you can compare the effects of market volatilities on Astar 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 Astar with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Griffon.
Diversification Opportunities for Astar and Griffon
Very poor diversification
The 3 months correlation between Astar and Griffon is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Astar 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 Astar 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 Astar i.e., Astar and Griffon go up and down completely randomly.
Pair Corralation between Astar and Griffon
Assuming the 90 days trading horizon Astar is expected to under-perform the Griffon. In addition to that, Astar is 1.81 times more volatile than Griffon. It trades about -0.02 of its total potential returns per unit of risk. Griffon is currently generating about 0.05 per unit of volatility. If you would invest 5,819 in Griffon on October 20, 2024 and sell it today you would earn a total of 1,843 from holding Griffon or generate 31.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 69.76% |
| Values | Daily Returns |
Astar vs. Griffon
Performance |
| Timeline |
| Astar |
| Griffon |
Astar and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Griffon
The main advantage of trading using opposite Astar and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar 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.The idea behind Astar and Griffon 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.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |