Correlation Between Griffon and United Parks
Can any of the company-specific risk be diversified away by investing in both Griffon and United Parks 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 United Parks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and United Parks Resorts, you can compare the effects of market volatilities on Griffon and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and United Parks.
Diversification Opportunities for Griffon and United Parks
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffon and United is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Griffon i.e., Griffon and United Parks go up and down completely randomly.
Pair Corralation between Griffon and United Parks
Considering the 90-day investment horizon Griffon is expected to under-perform the United Parks. In addition to that, Griffon is 1.08 times more volatile than United Parks Resorts. It trades about -0.14 of its total potential returns per unit of risk. United Parks Resorts is currently generating about -0.12 per unit of volatility. If you would invest 5,731 in United Parks Resorts on October 17, 2024 and sell it today you would lose (261.00) from holding United Parks Resorts or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. United Parks Resorts
Performance |
| Timeline |
| Griffon |
| United Parks Resorts |
Griffon and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and United Parks
The main advantage of trading using opposite Griffon and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| United Parks vs. Weyco Group | United Parks vs. Juniata Valley Financial | United Parks vs. Senmiao Technology | United Parks vs. Newell Brands |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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