Correlation Between Griffon and Mammoth Energy
Can any of the company-specific risk be diversified away by investing in both Griffon and Mammoth Energy 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 Mammoth Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Mammoth Energy Services, you can compare the effects of market volatilities on Griffon and Mammoth Energy 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 Mammoth Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Mammoth Energy.
Diversification Opportunities for Griffon and Mammoth Energy
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Griffon and Mammoth is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Mammoth Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mammoth Energy Services 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 Mammoth Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mammoth Energy Services has no effect on the direction of Griffon i.e., Griffon and Mammoth Energy go up and down completely randomly.
Pair Corralation between Griffon and Mammoth Energy
Considering the 90-day investment horizon Griffon is expected to generate 0.84 times more return on investment than Mammoth Energy. However, Griffon is 1.19 times less risky than Mammoth Energy. It trades about 0.1 of its potential returns per unit of risk. Mammoth Energy Services is currently generating about -0.01 per unit of risk. If you would invest 4,561 in Griffon on August 24, 2024 and sell it today you would earn a total of 3,567 from holding Griffon or generate 78.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Mammoth Energy Services
Performance |
| Timeline |
| Griffon |
| Mammoth Energy Services |
Griffon and Mammoth Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Mammoth Energy
The main advantage of trading using opposite Griffon and Mammoth Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Mammoth Energy 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 Mammoth Energy will offset losses from the drop in Mammoth Energy's long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| Mammoth Energy vs. Matthews International | Mammoth Energy vs. Griffon | Mammoth Energy vs. Steel Partners Holdings | Mammoth Energy 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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