Correlation Between GBS Software and Griffon
Can any of the company-specific risk be diversified away by investing in both GBS Software and Griffon 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 GBS Software and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GBS Software AG and Griffon, you can compare the effects of market volatilities on GBS Software and Griffon 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 GBS Software with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of GBS Software and Griffon.
Diversification Opportunities for GBS Software and Griffon
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GBS and Griffon is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding GBS Software AG and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and GBS Software 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 GBS Software AG are associated (or correlated) with Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of GBS Software i.e., GBS Software and Griffon go up and down completely randomly.
Pair Corralation between GBS Software and Griffon
Assuming the 90 days trading horizon GBS Software AG is expected to generate 1.48 times more return on investment than Griffon. However, GBS Software is 1.48 times more volatile than Griffon. It trades about 0.19 of its potential returns per unit of risk. Griffon is currently generating about -0.12 per unit of risk. If you would invest 260.00 in GBS Software AG on October 30, 2024 and sell it today you would earn a total of 42.00 from holding GBS Software AG or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.37% |
| Values | Daily Returns |
GBS Software AG vs. Griffon
Performance |
| Timeline |
| GBS Software AG |
| Griffon |
GBS Software and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GBS Software and Griffon
The main advantage of trading using opposite GBS Software and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GBS Software position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.| GBS Software vs. EVS Broadcast Equipment | GBS Software vs. Elmos Semiconductor SE | GBS Software vs. Nordic Semiconductor ASA | GBS Software vs. Transport International Holdings |
| Griffon vs. Information Services International Dentsu | Griffon vs. BJs Restaurants | Griffon vs. COSMOSTEEL HLDGS | Griffon vs. Olympic Steel |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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