Correlation Between Belden and Griffon
Can any of the company-specific risk be diversified away by investing in both Belden 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 Belden and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Belden Inc and Griffon, you can compare the effects of market volatilities on Belden 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 Belden with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Belden and Griffon.
Diversification Opportunities for Belden and Griffon
Weak diversification
The 3 months correlation between Belden and Griffon is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Belden Inc and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Belden 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 Belden Inc 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 Belden i.e., Belden and Griffon go up and down completely randomly.
Pair Corralation between Belden and Griffon
Considering the 90-day investment horizon Belden is expected to generate 2.58 times less return on investment than Griffon. But when comparing it to its historical volatility, Belden Inc is 1.23 times less risky than Griffon. It trades about 0.11 of its potential returns per unit of risk. Griffon is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 7,200 in Griffon on October 20, 2024 and sell it today you would earn a total of 462.00 from holding Griffon or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Belden Inc vs. Griffon
Performance |
| Timeline |
| Belden Inc |
| Griffon |
Belden and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Belden and Griffon
The main advantage of trading using opposite Belden and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Belden 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.| Belden vs. Clearfield | Belden vs. Comtech Telecommunications Corp | Belden vs. Knowles Cor | Belden vs. Extreme Networks |
| 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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