Correlation Between Griffon and Dine Brands
Can any of the company-specific risk be diversified away by investing in both Griffon and Dine Brands 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 Dine Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Dine Brands Global, you can compare the effects of market volatilities on Griffon and Dine Brands 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 Dine Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Dine Brands.
Diversification Opportunities for Griffon and Dine Brands
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffon and Dine is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Dine Brands Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dine Brands Global 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 Dine Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dine Brands Global has no effect on the direction of Griffon i.e., Griffon and Dine Brands go up and down completely randomly.
Pair Corralation between Griffon and Dine Brands
Considering the 90-day investment horizon Griffon is expected to generate 1.63 times more return on investment than Dine Brands. However, Griffon is 1.63 times more volatile than Dine Brands Global. It trades about 0.16 of its potential returns per unit of risk. Dine Brands Global is currently generating about -0.07 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 Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Dine Brands Global
Performance |
| Timeline |
| Griffon |
| Dine Brands Global |
Griffon and Dine Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Dine Brands
The main advantage of trading using opposite Griffon and Dine Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Dine Brands 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 Dine Brands will offset losses from the drop in Dine Brands' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Dine Brands vs. Noble Romans | Dine Brands vs. Flanigans Enterprises | Dine Brands vs. FAT Brands | Dine Brands vs. El Pollo Loco |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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