Correlation Between Griffon and T Rowe
Can any of the company-specific risk be diversified away by investing in both Griffon and T Rowe 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 T Rowe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and T Rowe Price, you can compare the effects of market volatilities on Griffon and T Rowe 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 T Rowe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and T Rowe.
Diversification Opportunities for Griffon and T Rowe
Very weak diversification
The 3 months correlation between Griffon and RRTLX is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and T Rowe Price in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Rowe Price 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 T Rowe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Rowe Price has no effect on the direction of Griffon i.e., Griffon and T Rowe go up and down completely randomly.
Pair Corralation between Griffon and T Rowe
Considering the 90-day investment horizon Griffon is expected to generate 6.94 times more return on investment than T Rowe. However, Griffon is 6.94 times more volatile than T Rowe Price. It trades about 0.1 of its potential returns per unit of risk. T Rowe Price is currently generating about 0.11 per unit of risk. If you would invest 3,634 in Griffon on September 2, 2024 and sell it today you would earn a total of 4,796 from holding Griffon or generate 131.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. T Rowe Price
Performance |
| Timeline |
| Griffon |
| T Rowe Price |
Griffon and T Rowe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and T Rowe
The main advantage of trading using opposite Griffon and T Rowe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, T Rowe 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 T Rowe will offset losses from the drop in T Rowe's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |