Correlation Between Griffon and Kronos Worldwide
Can any of the company-specific risk be diversified away by investing in both Griffon and Kronos Worldwide 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 Kronos Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Kronos Worldwide, you can compare the effects of market volatilities on Griffon and Kronos Worldwide 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 Kronos Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Kronos Worldwide.
Diversification Opportunities for Griffon and Kronos Worldwide
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Griffon and Kronos is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Kronos Worldwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kronos Worldwide 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 Kronos Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kronos Worldwide has no effect on the direction of Griffon i.e., Griffon and Kronos Worldwide go up and down completely randomly.
Pair Corralation between Griffon and Kronos Worldwide
Considering the 90-day investment horizon Griffon is expected to generate 2.68 times more return on investment than Kronos Worldwide. However, Griffon is 2.68 times more volatile than Kronos Worldwide. It trades about 0.17 of its potential returns per unit of risk. Kronos Worldwide is currently generating about -0.24 per unit of risk. If you would invest 6,797 in Griffon on September 13, 2024 and sell it today you would earn a total of 1,107 from holding Griffon or generate 16.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Kronos Worldwide
Performance |
| Timeline |
| Griffon |
| Kronos Worldwide |
Griffon and Kronos Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Kronos Worldwide
The main advantage of trading using opposite Griffon and Kronos Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Kronos Worldwide 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 Kronos Worldwide will offset losses from the drop in Kronos Worldwide's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Kronos Worldwide vs. Perimeter Solutions SA | Kronos Worldwide vs. Sensient Technologies | Kronos Worldwide vs. Element Solutions | Kronos Worldwide vs. Quaker Chemical |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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