Correlation Between Griffon and Global Tech
Can any of the company-specific risk be diversified away by investing in both Griffon and Global Tech 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 Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Global Tech Industries, you can compare the effects of market volatilities on Griffon and Global Tech 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 Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Global Tech.
Diversification Opportunities for Griffon and Global Tech
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Griffon and Global is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Global Tech Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Tech Industries 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 Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Tech Industries has no effect on the direction of Griffon i.e., Griffon and Global Tech go up and down completely randomly.
Pair Corralation between Griffon and Global Tech
Considering the 90-day investment horizon Griffon is expected to generate 4.79 times less return on investment than Global Tech. But when comparing it to its historical volatility, Griffon is 8.91 times less risky than Global Tech. It trades about 0.34 of its potential returns per unit of risk. Global Tech Industries is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2.50 in Global Tech Industries on September 1, 2024 and sell it today you would earn a total of 0.51 from holding Global Tech Industries or generate 20.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Griffon vs. Global Tech Industries
Performance |
| Timeline |
| Griffon |
| Global Tech Industries |
Griffon and Global Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Global Tech
The main advantage of trading using opposite Griffon and Global Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Global Tech 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 Tech will offset losses from the drop in Global Tech's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Global Tech vs. Seychelle Environmtl | Global Tech vs. Energy and Water | Global Tech vs. One World Universe | Global Tech vs. Vow ASA |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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