Correlation Between Brunswick and Griffon
Can any of the company-specific risk be diversified away by investing in both Brunswick 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 Brunswick and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brunswick and Griffon, you can compare the effects of market volatilities on Brunswick 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 Brunswick with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brunswick and Griffon.
Diversification Opportunities for Brunswick and Griffon
Weak diversification
The 3 months correlation between Brunswick and Griffon is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Brunswick and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Brunswick 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 Brunswick 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 Brunswick i.e., Brunswick and Griffon go up and down completely randomly.
Pair Corralation between Brunswick and Griffon
Allowing for the 90-day total investment horizon Brunswick is expected to generate 4.27 times less return on investment than Griffon. But when comparing it to its historical volatility, Brunswick is 1.2 times less risky than Griffon. It trades about 0.03 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 3,211 in Griffon on August 29, 2024 and sell it today you would earn a total of 5,226 from holding Griffon or generate 162.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brunswick vs. Griffon
Performance |
| Timeline |
| Brunswick |
| Griffon |
Brunswick and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brunswick and Griffon
The main advantage of trading using opposite Brunswick and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brunswick 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.| Brunswick vs. MCBC Holdings | Brunswick vs. Marine Products | Brunswick vs. Winnebago Industries | Brunswick vs. LCI Industries |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |