Correlation Between Griffon and United Airlines
Can any of the company-specific risk be diversified away by investing in both Griffon and United Airlines 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 United Airlines into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and United Airlines Holdings, you can compare the effects of market volatilities on Griffon and United Airlines 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 United Airlines. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and United Airlines.
Diversification Opportunities for Griffon and United Airlines
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffon and United is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and United Airlines Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Airlines 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 United Airlines. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Airlines Holdings has no effect on the direction of Griffon i.e., Griffon and United Airlines go up and down completely randomly.
Pair Corralation between Griffon and United Airlines
Considering the 90-day investment horizon Griffon is expected to generate 0.99 times more return on investment than United Airlines. However, Griffon is 1.01 times less risky than United Airlines. It trades about 0.12 of its potential returns per unit of risk. United Airlines Holdings is currently generating about 0.09 per unit of risk. If you would invest 3,007 in Griffon on August 31, 2024 and sell it today you would earn a total of 5,344 from holding Griffon or generate 177.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. United Airlines Holdings
Performance |
| Timeline |
| Griffon |
| United Airlines Holdings |
Griffon and United Airlines Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and United Airlines
The main advantage of trading using opposite Griffon and United Airlines positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, United Airlines 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 United Airlines will offset losses from the drop in United Airlines' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
| United Airlines vs. American Airlines Group | United Airlines vs. Southwest Airlines | United Airlines vs. JetBlue Airways Corp | United Airlines vs. Delta Air Lines |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |