Correlation Between Griffon and Tyson Foods
Can any of the company-specific risk be diversified away by investing in both Griffon and Tyson Foods 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 Tyson Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Tyson Foods, you can compare the effects of market volatilities on Griffon and Tyson Foods 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 Tyson Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Tyson Foods.
Diversification Opportunities for Griffon and Tyson Foods
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Griffon and Tyson is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Tyson Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tyson Foods 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 Tyson Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tyson Foods has no effect on the direction of Griffon i.e., Griffon and Tyson Foods go up and down completely randomly.
Pair Corralation between Griffon and Tyson Foods
Considering the 90-day investment horizon Griffon is expected to generate 1.84 times more return on investment than Tyson Foods. However, Griffon is 1.84 times more volatile than Tyson Foods. It trades about 0.1 of its potential returns per unit of risk. Tyson Foods is currently generating about 0.06 per unit of risk. If you would invest 3,580 in Griffon on August 31, 2024 and sell it today you would earn a total of 4,850 from holding Griffon or generate 135.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Tyson Foods
Performance |
| Timeline |
| Griffon |
| Tyson Foods |
Griffon and Tyson Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Tyson Foods
The main advantage of trading using opposite Griffon and Tyson Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Tyson Foods 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 Tyson Foods will offset losses from the drop in Tyson Foods' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Tyson Foods vs. Cal Maine Foods | Tyson Foods vs. Dole PLC | Tyson Foods vs. Adecoagro SA | Tyson Foods vs. Fresh Del Monte |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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