Correlation Between Griffon and Anheuser Busch
Can any of the company-specific risk be diversified away by investing in both Griffon and Anheuser Busch 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 Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Anheuser Busch Inbev, you can compare the effects of market volatilities on Griffon and Anheuser Busch 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 Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Anheuser Busch.
Diversification Opportunities for Griffon and Anheuser Busch
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Griffon and Anheuser is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Anheuser Busch Inbev in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch Inbev 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 Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch Inbev has no effect on the direction of Griffon i.e., Griffon and Anheuser Busch go up and down completely randomly.
Pair Corralation between Griffon and Anheuser Busch
Considering the 90-day investment horizon Griffon is expected to generate 2.39 times more return on investment than Anheuser Busch. However, Griffon is 2.39 times more volatile than Anheuser Busch Inbev. It trades about 0.13 of its potential returns per unit of risk. Anheuser Busch Inbev is currently generating about -0.26 per unit of risk. If you would invest 6,466 in Griffon on September 12, 2024 and sell it today you would earn a total of 1,519 from holding Griffon or generate 23.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Anheuser Busch Inbev
Performance |
| Timeline |
| Griffon |
| Anheuser Busch Inbev |
Griffon and Anheuser Busch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Anheuser Busch
The main advantage of trading using opposite Griffon and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Anheuser Busch vs. Boston Beer | Anheuser Busch vs. Molson Coors Beverage | Anheuser Busch vs. Heineken NV | Anheuser Busch vs. Ambev 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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