Correlation Between Griffon and Life Time
Can any of the company-specific risk be diversified away by investing in both Griffon and Life Time 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 Life Time into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Life Time Group, you can compare the effects of market volatilities on Griffon and Life Time 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 Life Time. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Life Time.
Diversification Opportunities for Griffon and Life Time
Modest diversification
The 3 months correlation between Griffon and Life is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Life Time Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Time Group 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 Life Time. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Time Group has no effect on the direction of Griffon i.e., Griffon and Life Time go up and down completely randomly.
Pair Corralation between Griffon and Life Time
Considering the 90-day investment horizon Griffon is expected to generate 0.9 times more return on investment than Life Time. However, Griffon is 1.11 times less risky than Life Time. It trades about 0.09 of its potential returns per unit of risk. Life Time Group is currently generating about 0.06 per unit of risk. If you would invest 3,211 in Griffon on August 29, 2024 and sell it today you would earn a total of 5,226 from holding Griffon or generate 162.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Life Time Group
Performance |
| Timeline |
| Griffon |
| Life Time Group |
Griffon and Life Time Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Life Time
The main advantage of trading using opposite Griffon and Life Time positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Life Time 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 Life Time will offset losses from the drop in Life Time's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Life Time vs. Bowlero Corp | Life Time vs. JAKKS Pacific | Life Time vs. Acushnet Holdings Corp | Life Time vs. OneSpaWorld 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 Stocks Directory module to find actively traded stocks across global markets.
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