Correlation Between Griffon and Seaboard
Can any of the company-specific risk be diversified away by investing in both Griffon and Seaboard 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 Seaboard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Seaboard, you can compare the effects of market volatilities on Griffon and Seaboard 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 Seaboard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Seaboard.
Diversification Opportunities for Griffon and Seaboard
Very good diversification
The 3 months correlation between Griffon and Seaboard is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Seaboard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Seaboard 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 Seaboard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Seaboard has no effect on the direction of Griffon i.e., Griffon and Seaboard go up and down completely randomly.
Pair Corralation between Griffon and Seaboard
Considering the 90-day investment horizon Griffon is expected to generate 1.37 times more return on investment than Seaboard. However, Griffon is 1.37 times more volatile than Seaboard. It trades about 0.22 of its potential returns per unit of risk. Seaboard is currently generating about 0.04 per unit of risk. If you would invest 7,200 in Griffon on October 20, 2024 and sell it today you would earn a total of 462.00 from holding Griffon or generate 6.42% 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. Seaboard
Performance |
| Timeline |
| Griffon |
| Seaboard |
Griffon and Seaboard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Seaboard
The main advantage of trading using opposite Griffon and Seaboard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Seaboard 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 Seaboard will offset losses from the drop in Seaboard's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Seaboard vs. White Mountains Insurance | Seaboard vs. Cable One | Seaboard vs. NVR Inc | Seaboard vs. Alexanders |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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