Correlation Between Griffon and Dennys Corp
Can any of the company-specific risk be diversified away by investing in both Griffon and Dennys Corp 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 Dennys Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Dennys Corp, you can compare the effects of market volatilities on Griffon and Dennys Corp 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 Dennys Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Dennys Corp.
Diversification Opportunities for Griffon and Dennys Corp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Griffon and Dennys is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Dennys Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dennys Corp 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 Dennys Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dennys Corp has no effect on the direction of Griffon i.e., Griffon and Dennys Corp go up and down completely randomly.
Pair Corralation between Griffon and Dennys Corp
Considering the 90-day investment horizon Griffon is expected to generate 0.96 times more return on investment than Dennys Corp. However, Griffon is 1.05 times less risky than Dennys Corp. It trades about 0.09 of its potential returns per unit of risk. Dennys Corp is currently generating about -0.05 per unit of risk. If you would invest 4,089 in Griffon on September 12, 2024 and sell it today you would earn a total of 3,918 from holding Griffon or generate 95.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Dennys Corp
Performance |
| Timeline |
| Griffon |
| Dennys Corp |
Griffon and Dennys Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Dennys Corp
The main advantage of trading using opposite Griffon and Dennys Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Dennys Corp 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 Dennys Corp will offset losses from the drop in Dennys Corp's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Dennys Corp vs. Noble Romans | Dennys Corp vs. Good Times Restaurants | Dennys Corp vs. Flanigans Enterprises | Dennys Corp vs. FAT Brands |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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