Correlation Between Griffon and Bright Scholar
Can any of the company-specific risk be diversified away by investing in both Griffon and Bright Scholar 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 Bright Scholar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Bright Scholar Education, you can compare the effects of market volatilities on Griffon and Bright Scholar 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 Bright Scholar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Bright Scholar.
Diversification Opportunities for Griffon and Bright Scholar
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Griffon and Bright is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Bright Scholar Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bright Scholar Education 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 Bright Scholar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bright Scholar Education has no effect on the direction of Griffon i.e., Griffon and Bright Scholar go up and down completely randomly.
Pair Corralation between Griffon and Bright Scholar
Considering the 90-day investment horizon Griffon is expected to generate 1.21 times less return on investment than Bright Scholar. But when comparing it to its historical volatility, Griffon is 1.88 times less risky than Bright Scholar. It trades about 0.08 of its potential returns per unit of risk. Bright Scholar Education is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 141.00 in Bright Scholar Education on August 28, 2024 and sell it today you would earn a total of 44.00 from holding Bright Scholar Education or generate 31.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.09% |
| Values | Daily Returns |
Griffon vs. Bright Scholar Education
Performance |
| Timeline |
| Griffon |
| Bright Scholar Education |
Griffon and Bright Scholar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Bright Scholar
The main advantage of trading using opposite Griffon and Bright Scholar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Bright Scholar 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 Bright Scholar will offset losses from the drop in Bright Scholar's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Bright Scholar vs. American Public Education | Bright Scholar vs. Lincoln Educational Services | Bright Scholar vs. Adtalem Global Education |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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