Correlation Between Griffon and Awilco Drilling
Can any of the company-specific risk be diversified away by investing in both Griffon and Awilco Drilling 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 Awilco Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Awilco Drilling PLC, you can compare the effects of market volatilities on Griffon and Awilco Drilling 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 Awilco Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Awilco Drilling.
Diversification Opportunities for Griffon and Awilco Drilling
-0.92 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Griffon and Awilco is -0.92. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Awilco Drilling PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Awilco Drilling PLC 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 Awilco Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Awilco Drilling PLC has no effect on the direction of Griffon i.e., Griffon and Awilco Drilling go up and down completely randomly.
Pair Corralation between Griffon and Awilco Drilling
Considering the 90-day investment horizon Griffon is expected to generate 8.31 times more return on investment than Awilco Drilling. However, Griffon is 8.31 times more volatile than Awilco Drilling PLC. It trades about 0.16 of its potential returns per unit of risk. Awilco Drilling PLC is currently generating about -0.21 per unit of risk. If you would invest 6,980 in Griffon on September 12, 2024 and sell it today you would earn a total of 1,027 from holding Griffon or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Awilco Drilling PLC
Performance |
| Timeline |
| Griffon |
| Awilco Drilling PLC |
Griffon and Awilco Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Awilco Drilling
The main advantage of trading using opposite Griffon and Awilco Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Awilco Drilling 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 Awilco Drilling will offset losses from the drop in Awilco Drilling's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Awilco Drilling vs. Noble plc | Awilco Drilling vs. Transocean | Awilco Drilling vs. Helmerich and Payne | Awilco Drilling vs. Patterson UTI Energy |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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