Correlation Between Griffon and Global Partner
Can any of the company-specific risk be diversified away by investing in both Griffon and Global Partner 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 Global Partner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Global Partner Acq, you can compare the effects of market volatilities on Griffon and Global Partner 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 Global Partner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Global Partner.
Diversification Opportunities for Griffon and Global Partner
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Griffon and Global is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Global Partner Acq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Partner Acq 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 Global Partner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Partner Acq has no effect on the direction of Griffon i.e., Griffon and Global Partner go up and down completely randomly.
Pair Corralation between Griffon and Global Partner
Considering the 90-day investment horizon Griffon is expected to generate 1.08 times more return on investment than Global Partner. However, Griffon is 1.08 times more volatile than Global Partner Acq. It trades about 0.07 of its potential returns per unit of risk. Global Partner Acq is currently generating about -0.23 per unit of risk. If you would invest 6,497 in Griffon on September 13, 2024 and sell it today you would earn a total of 1,442 from holding Griffon or generate 22.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 12.0% |
| Values | Daily Returns |
Griffon vs. Global Partner Acq
Performance |
| Timeline |
| Griffon |
| Global Partner Acq |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Griffon and Global Partner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Global Partner
The main advantage of trading using opposite Griffon and Global Partner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Global Partner 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 Global Partner will offset losses from the drop in Global Partner's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Global Partner vs. Simon Property Group | Global Partner vs. The Gap, | Global Partner vs. Citi Trends | Global Partner vs. Burlington Stores |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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