Correlation Between Griffon and Steel Partners
Can any of the company-specific risk be diversified away by investing in both Griffon and Steel Partners 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 Steel Partners into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Steel Partners Holdings, you can compare the effects of market volatilities on Griffon and Steel Partners 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 Steel Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Steel Partners.
Diversification Opportunities for Griffon and Steel Partners
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Griffon and Steel is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Steel Partners Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Steel Partners Holdings 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 Steel Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Steel Partners Holdings has no effect on the direction of Griffon i.e., Griffon and Steel Partners go up and down completely randomly.
Pair Corralation between Griffon and Steel Partners
Considering the 90-day investment horizon Griffon is expected to generate 1.14 times more return on investment than Steel Partners. However, Griffon is 1.14 times more volatile than Steel Partners Holdings. It trades about 0.07 of its potential returns per unit of risk. Steel Partners Holdings is currently generating about 0.0 per unit of risk. If you would invest 3,615 in Griffon on October 20, 2024 and sell it today you would earn a total of 4,047 from holding Griffon or generate 111.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Steel Partners Holdings
Performance |
| Timeline |
| Griffon |
| Steel Partners Holdings |
Griffon and Steel Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Steel Partners
The main advantage of trading using opposite Griffon and Steel Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Steel Partners 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 Steel Partners will offset losses from the drop in Steel Partners' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Compass Diversified | Steel Partners vs. Tejon Ranch Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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