Correlation Between Griffon and Baozun
Can any of the company-specific risk be diversified away by investing in both Griffon and Baozun 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 Baozun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Baozun Inc, you can compare the effects of market volatilities on Griffon and Baozun 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 Baozun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Baozun.
Diversification Opportunities for Griffon and Baozun
Very good diversification
The 3 months correlation between Griffon and Baozun is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Baozun Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baozun Inc 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 Baozun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baozun Inc has no effect on the direction of Griffon i.e., Griffon and Baozun go up and down completely randomly.
Pair Corralation between Griffon and Baozun
Considering the 90-day investment horizon Griffon is expected to generate 0.73 times more return on investment than Baozun. However, Griffon is 1.36 times less risky than Baozun. It trades about 0.16 of its potential returns per unit of risk. Baozun Inc is currently generating about 0.06 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 | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Griffon vs. Baozun Inc
Performance |
| Timeline |
| Griffon |
| Baozun Inc |
Griffon and Baozun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Baozun
The main advantage of trading using opposite Griffon and Baozun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Baozun 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 Baozun will offset losses from the drop in Baozun's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Baozun vs. PDD Holdings | Baozun vs. JD Inc Adr | Baozun vs. Global E Online | Baozun vs. Vipshop Holdings Limited |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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