Correlation Between Griffon and Better Home
Can any of the company-specific risk be diversified away by investing in both Griffon and Better Home 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 Better Home into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Better Home Finance, you can compare the effects of market volatilities on Griffon and Better Home 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 Better Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Better Home.
Diversification Opportunities for Griffon and Better Home
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Griffon and Better is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Better Home Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Better Home Finance 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 Better Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Better Home Finance has no effect on the direction of Griffon i.e., Griffon and Better Home go up and down completely randomly.
Pair Corralation between Griffon and Better Home
Considering the 90-day investment horizon Griffon is expected to generate 0.45 times more return on investment than Better Home. However, Griffon is 2.24 times less risky than Better Home. It trades about -0.06 of its potential returns per unit of risk. Better Home Finance is currently generating about -0.11 per unit of risk. If you would invest 8,035 in Griffon on September 14, 2024 and sell it today you would lose (276.00) from holding Griffon or give up 3.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Griffon vs. Better Home Finance
Performance |
| Timeline |
| Griffon |
| Better Home Finance |
Griffon and Better Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Better Home
The main advantage of trading using opposite Griffon and Better Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Better Home 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 Better Home will offset losses from the drop in Better Home's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Better Home vs. Allegheny Technologies Incorporated | Better Home vs. CECO Environmental Corp | Better Home vs. Boston Beer | Better Home vs. ArcelorMittal SA ADR |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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