Correlation Between Griffon and Canlan Ice
Can any of the company-specific risk be diversified away by investing in both Griffon and Canlan Ice 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 Canlan Ice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Canlan Ice Sports, you can compare the effects of market volatilities on Griffon and Canlan Ice 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 Canlan Ice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Canlan Ice.
Diversification Opportunities for Griffon and Canlan Ice
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Griffon and Canlan is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Canlan Ice Sports in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canlan Ice Sports 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 Canlan Ice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canlan Ice Sports has no effect on the direction of Griffon i.e., Griffon and Canlan Ice go up and down completely randomly.
Pair Corralation between Griffon and Canlan Ice
Considering the 90-day investment horizon Griffon is expected to generate 18.76 times more return on investment than Canlan Ice. However, Griffon is 18.76 times more volatile than Canlan Ice Sports. It trades about 0.07 of its potential returns per unit of risk. Canlan Ice Sports is currently generating about 0.13 per unit of risk. If you would invest 3,946 in Griffon on October 25, 2024 and sell it today you would earn a total of 3,913 from holding Griffon or generate 99.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Canlan Ice Sports
Performance |
| Timeline |
| Griffon |
| Canlan Ice Sports |
Griffon and Canlan Ice Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Canlan Ice
The main advantage of trading using opposite Griffon and Canlan Ice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Canlan Ice 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 Canlan Ice will offset losses from the drop in Canlan Ice's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Canlan Ice vs. Eldorado Gold Corp | Canlan Ice vs. Tyson Foods | Canlan Ice vs. Lion One Metals | Canlan Ice vs. Griffon |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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