Correlation Between Griffon and Tandem Diabetes
Can any of the company-specific risk be diversified away by investing in both Griffon and Tandem Diabetes 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 Tandem Diabetes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Tandem Diabetes Care, you can compare the effects of market volatilities on Griffon and Tandem Diabetes 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 Tandem Diabetes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Tandem Diabetes.
Diversification Opportunities for Griffon and Tandem Diabetes
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Griffon and Tandem is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Tandem Diabetes Care in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tandem Diabetes Care 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 Tandem Diabetes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tandem Diabetes Care has no effect on the direction of Griffon i.e., Griffon and Tandem Diabetes go up and down completely randomly.
Pair Corralation between Griffon and Tandem Diabetes
Considering the 90-day investment horizon Griffon is expected to generate 0.65 times more return on investment than Tandem Diabetes. However, Griffon is 1.54 times less risky than Tandem Diabetes. It trades about 0.08 of its potential returns per unit of risk. Tandem Diabetes Care is currently generating about 0.05 per unit of risk. If you would invest 5,170 in Griffon on September 4, 2024 and sell it today you would earn a total of 3,112 from holding Griffon or generate 60.19% 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. Tandem Diabetes Care
Performance |
| Timeline |
| Griffon |
| Tandem Diabetes Care |
Griffon and Tandem Diabetes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Tandem Diabetes
The main advantage of trading using opposite Griffon and Tandem Diabetes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Tandem Diabetes 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 Tandem Diabetes will offset losses from the drop in Tandem Diabetes' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Tandem Diabetes vs. DexCom Inc | Tandem Diabetes vs. Inspire Medical Systems | Tandem Diabetes vs. Penumbra | Tandem Diabetes vs. Insulet |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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