Correlation Between Griffon and LG Display
Can any of the company-specific risk be diversified away by investing in both Griffon and LG Display 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 LG Display into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and LG Display Co, you can compare the effects of market volatilities on Griffon and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and LG Display.
Diversification Opportunities for Griffon and LG Display
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Griffon and LPL is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of Griffon i.e., Griffon and LG Display go up and down completely randomly.
Pair Corralation between Griffon and LG Display
Considering the 90-day investment horizon Griffon is expected to under-perform the LG Display. But the stock apears to be less risky and, when comparing its historical volatility, Griffon is 1.19 times less risky than LG Display. The stock trades about -0.14 of its potential returns per unit of risk. The LG Display Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 319.00 in LG Display Co on October 17, 2024 and sell it today you would earn a total of 6.00 from holding LG Display Co or generate 1.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. LG Display Co
Performance |
| Timeline |
| Griffon |
| LG Display |
Griffon and LG Display Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and LG Display
The main advantage of trading using opposite Griffon and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| LG Display vs. VOXX International | LG Display vs. Emerson Radio | LG Display vs. Universal Electronics | LG Display vs. Sonos Inc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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