Correlation Between Avient Corp and Griffon
Can any of the company-specific risk be diversified away by investing in both Avient Corp 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 Avient Corp and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Avient Corp and Griffon, you can compare the effects of market volatilities on Avient Corp 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 Avient Corp with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Avient Corp and Griffon.
Diversification Opportunities for Avient Corp and Griffon
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Avient and Griffon is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Avient Corp and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Avient Corp 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 Avient Corp 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 Avient Corp i.e., Avient Corp and Griffon go up and down completely randomly.
Pair Corralation between Avient Corp and Griffon
Given the investment horizon of 90 days Avient Corp is expected to generate 1.88 times less return on investment than Griffon. But when comparing it to its historical volatility, Avient Corp is 1.28 times less risky than Griffon. It trades about 0.06 of its potential returns per unit of risk. Griffon is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,236 in Griffon on August 27, 2024 and sell it today you would earn a total of 5,060 from holding Griffon or generate 156.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Avient Corp vs. Griffon
Performance |
| Timeline |
| Avient Corp |
| Griffon |
Avient Corp and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Avient Corp and Griffon
The main advantage of trading using opposite Avient Corp and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Avient Corp 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.| Avient Corp vs. Axalta Coating Systems | Avient Corp vs. H B Fuller | Avient Corp vs. Quaker Chemical | Avient Corp vs. Cabot |
| 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |