Correlation Between Griffon and CEZ A
Can any of the company-specific risk be diversified away by investing in both Griffon and CEZ A 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 CEZ A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and CEZ A S, you can compare the effects of market volatilities on Griffon and CEZ A 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 CEZ A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and CEZ A.
Diversification Opportunities for Griffon and CEZ A
Very good diversification
The 3 months correlation between Griffon and CEZ is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and CEZ A S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ A S 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 CEZ A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ A S has no effect on the direction of Griffon i.e., Griffon and CEZ A go up and down completely randomly.
Pair Corralation between Griffon and CEZ A
Considering the 90-day investment horizon Griffon is expected to generate 1.33 times more return on investment than CEZ A. However, Griffon is 1.33 times more volatile than CEZ A S. It trades about 0.09 of its potential returns per unit of risk. CEZ A S is currently generating about 0.05 per unit of risk. If you would invest 3,327 in Griffon on September 2, 2024 and sell it today you would earn a total of 5,103 from holding Griffon or generate 153.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 78.02% |
| Values | Daily Returns |
Griffon vs. CEZ A S
Performance |
| Timeline |
| Griffon |
| CEZ A S |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Griffon and CEZ A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and CEZ A
The main advantage of trading using opposite Griffon and CEZ A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, CEZ A 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 CEZ A will offset losses from the drop in CEZ A's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| CEZ A vs. SEI Investments | CEZ A vs. FiscalNote Holdings | CEZ A vs. Dave Busters Entertainment | CEZ A vs. CT Real Estate |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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