Correlation Between Griffon and Sonida Senior
Can any of the company-specific risk be diversified away by investing in both Griffon and Sonida Senior 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 Sonida Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Sonida Senior Living, you can compare the effects of market volatilities on Griffon and Sonida Senior 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 Sonida Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Sonida Senior.
Diversification Opportunities for Griffon and Sonida Senior
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Griffon and Sonida is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Griffon i.e., Griffon and Sonida Senior go up and down completely randomly.
Pair Corralation between Griffon and Sonida Senior
Considering the 90-day investment horizon Griffon is expected to generate 1.35 times more return on investment than Sonida Senior. However, Griffon is 1.35 times more volatile than Sonida Senior Living. It trades about 0.3 of its potential returns per unit of risk. Sonida Senior Living is currently generating about -0.02 per unit of risk. If you would invest 6,422 in Griffon on August 29, 2024 and sell it today you would earn a total of 2,015 from holding Griffon or generate 31.38% 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. Sonida Senior Living
Performance |
| Timeline |
| Griffon |
| Sonida Senior Living |
Griffon and Sonida Senior Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Sonida Senior
The main advantage of trading using opposite Griffon and Sonida Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Sonida Senior 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 Sonida Senior will offset losses from the drop in Sonida Senior'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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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