Correlation Between Cebu Air and Griffon
Can any of the company-specific risk be diversified away by investing in both Cebu Air 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 Cebu Air and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cebu Air ADR and Griffon, you can compare the effects of market volatilities on Cebu Air 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 Cebu Air with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cebu Air and Griffon.
Diversification Opportunities for Cebu Air and Griffon
Pay attention - limited upside
The 3 months correlation between Cebu and Griffon is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Cebu Air ADR and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Cebu Air 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 Cebu Air ADR 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 Cebu Air i.e., Cebu Air and Griffon go up and down completely randomly.
Pair Corralation between Cebu Air and Griffon
Assuming the 90 days horizon Cebu Air ADR is expected to under-perform the Griffon. In addition to that, Cebu Air is 1.28 times more volatile than Griffon. It trades about -0.02 of its total potential returns per unit of risk. Griffon is currently generating about 0.09 per unit of volatility. If you would invest 3,302 in Griffon on September 4, 2024 and sell it today you would earn a total of 4,964 from holding Griffon or generate 150.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cebu Air ADR vs. Griffon
Performance |
| Timeline |
| Cebu Air ADR |
| Griffon |
Cebu Air and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cebu Air and Griffon
The main advantage of trading using opposite Cebu Air and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cebu Air 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.| Cebu Air vs. Enersys | Cebu Air vs. Hurco Companies | Cebu Air vs. LithiumBank Resources Corp | Cebu Air vs. Inflection Point Acquisition |
| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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