Correlation Between Griffon and Agro Capital
Can any of the company-specific risk be diversified away by investing in both Griffon and Agro Capital 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 Griffon and Agro Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Agro Capital Management, you can compare the effects of market volatilities on Griffon and Agro Capital 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 Griffon with a short position of Agro Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Agro Capital.
Diversification Opportunities for Griffon and Agro Capital
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Griffon and Agro is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Agro Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Capital Management and Griffon 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 Griffon are associated (or correlated) with Agro Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Capital Management has no effect on the direction of Griffon i.e., Griffon and Agro Capital go up and down completely randomly.
Pair Corralation between Griffon and Agro Capital
Considering the 90-day investment horizon Griffon is expected to generate 3.15 times less return on investment than Agro Capital. But when comparing it to its historical volatility, Griffon is 7.07 times less risky than Agro Capital. It trades about 0.26 of its potential returns per unit of risk. Agro Capital Management is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1.69 in Agro Capital Management on August 24, 2024 and sell it today you would lose (0.19) from holding Agro Capital Management or give up 11.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Agro Capital Management
Performance |
| Timeline |
| Griffon |
| Agro Capital Management |
Griffon and Agro Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Agro Capital
The main advantage of trading using opposite Griffon and Agro Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Agro Capital 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 Agro Capital will offset losses from the drop in Agro Capital's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Agro Capital vs. Grupo Bimbo SAB | Agro Capital vs. Becle SA de | Agro Capital vs. HUMANA INC | Agro Capital vs. Aquagold International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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