Correlation Between Griffon and Xponential Fitness
Can any of the company-specific risk be diversified away by investing in both Griffon and Xponential Fitness 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 Xponential Fitness into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Griffon and Xponential Fitness, you can compare the effects of market volatilities on Griffon and Xponential Fitness 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 Xponential Fitness. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Xponential Fitness.
Diversification Opportunities for Griffon and Xponential Fitness
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Griffon and Xponential is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Xponential Fitness in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xponential Fitness 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 Xponential Fitness. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xponential Fitness has no effect on the direction of Griffon i.e., Griffon and Xponential Fitness go up and down completely randomly.
Pair Corralation between Griffon and Xponential Fitness
Considering the 90-day investment horizon Griffon is expected to generate 0.61 times more return on investment than Xponential Fitness. However, Griffon is 1.64 times less risky than Xponential Fitness. It trades about 0.17 of its potential returns per unit of risk. Xponential Fitness is currently generating about 0.08 per unit of risk. If you would invest 6,270 in Griffon on September 2, 2024 and sell it today you would earn a total of 2,160 from holding Griffon or generate 34.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Griffon vs. Xponential Fitness
Performance |
| Timeline |
| Griffon |
| Xponential Fitness |
Griffon and Xponential Fitness Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Griffon and Xponential Fitness
The main advantage of trading using opposite Griffon and Xponential Fitness positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Xponential Fitness 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 Xponential Fitness will offset losses from the drop in Xponential Fitness' long position.| Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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