Correlation Between Griffon and GE Vernova
Can any of the company-specific risk be diversified away by investing in both Griffon and GE Vernova 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 GE Vernova into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and GE Vernova LLC, you can compare the effects of market volatilities on Griffon and GE Vernova 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 GE Vernova. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and GE Vernova.
Diversification Opportunities for Griffon and GE Vernova
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffon and GEV is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and GE Vernova LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GE Vernova LLC 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 GE Vernova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GE Vernova LLC has no effect on the direction of Griffon i.e., Griffon and GE Vernova go up and down completely randomly.
Pair Corralation between Griffon and GE Vernova
Considering the 90-day investment horizon Griffon is expected to generate 1.3 times more return on investment than GE Vernova. However, Griffon is 1.3 times more volatile than GE Vernova LLC. It trades about 0.34 of its potential returns per unit of risk. GE Vernova LLC is currently generating about 0.16 per unit of risk. If you would invest 6,274 in Griffon on September 1, 2024 and sell it today you would earn a total of 2,156 from holding Griffon or generate 34.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. GE Vernova LLC
Performance |
| Timeline |
| Griffon |
| GE Vernova LLC |
Griffon and GE Vernova Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and GE Vernova
The main advantage of trading using opposite Griffon and GE Vernova positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, GE Vernova 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 GE Vernova will offset losses from the drop in GE Vernova's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| GE Vernova vs. Equinix | GE Vernova vs. Stepstone Group | GE Vernova vs. Artisan Partners Asset | GE Vernova vs. Alvarium Tiedemann Holdings |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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