Correlation Between Griffon and Consol Energy
Can any of the company-specific risk be diversified away by investing in both Griffon and Consol Energy 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 Consol Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Consol Energy, you can compare the effects of market volatilities on Griffon and Consol Energy 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 Consol Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Consol Energy.
Diversification Opportunities for Griffon and Consol Energy
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffon and Consol is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Consol Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consol Energy 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 Consol Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consol Energy has no effect on the direction of Griffon i.e., Griffon and Consol Energy go up and down completely randomly.
Pair Corralation between Griffon and Consol Energy
Considering the 90-day investment horizon Griffon is expected to generate 0.91 times more return on investment than Consol Energy. However, Griffon is 1.1 times less risky than Consol Energy. It trades about 0.09 of its potential returns per unit of risk. Consol Energy is currently generating about 0.06 per unit of risk. If you would invest 3,191 in Griffon on August 26, 2024 and sell it today you would earn a total of 5,105 from holding Griffon or generate 159.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Consol Energy
Performance |
| Timeline |
| Griffon |
| Consol Energy |
Griffon and Consol Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Consol Energy
The main advantage of trading using opposite Griffon and Consol Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Consol Energy 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 Consol Energy will offset losses from the drop in Consol Energy's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Consol Energy vs. Alliance Resource Partners | Consol Energy vs. Natural Resource Partners | Consol Energy vs. Hallador Energy | Consol Energy vs. NACCO Industries |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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