Correlation Between Griffon and 62954WAK1

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Can any of the company-specific risk be diversified away by investing in both Griffon and 62954WAK1 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 62954WAK1 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and NTT 4372 27 JUL 27, you can compare the effects of market volatilities on Griffon and 62954WAK1 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 62954WAK1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and 62954WAK1.

Diversification Opportunities for Griffon and 62954WAK1

-0.24
  Correlation Coefficient

Very good diversification

The 3 months correlation between Griffon and 62954WAK1 is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and NTT 4372 27 JUL 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTT 4372 27 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 62954WAK1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTT 4372 27 has no effect on the direction of Griffon i.e., Griffon and 62954WAK1 go up and down completely randomly.

Pair Corralation between Griffon and 62954WAK1

Considering the 90-day investment horizon Griffon is expected to generate 8.01 times more return on investment than 62954WAK1. However, Griffon is 8.01 times more volatile than NTT 4372 27 JUL 27. It trades about 0.19 of its potential returns per unit of risk. NTT 4372 27 JUL 27 is currently generating about -0.17 per unit of risk. If you would invest  6,797  in Griffon on September 13, 2024 and sell it today you would earn a total of  1,210  from holding Griffon or generate 17.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy66.67%
ValuesDaily Returns

Griffon  vs.  NTT 4372 27 JUL 27

 Performance 
       Timeline  
Griffon 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Griffon reported solid returns over the last few months and may actually be approaching a breakup point.
NTT 4372 27 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days NTT 4372 27 JUL 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 62954WAK1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Griffon and 62954WAK1 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Griffon and 62954WAK1

The main advantage of trading using opposite Griffon and 62954WAK1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, 62954WAK1 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 62954WAK1 will offset losses from the drop in 62954WAK1's long position.
The idea behind Griffon and NTT 4372 27 JUL 27 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.

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