Correlation Between KINGBOARD CHEMICAL and Griffon
Can any of the company-specific risk be diversified away by investing in both KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KINGBOARD CHEMICAL and Griffon, you can compare the effects of market volatilities on KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of KINGBOARD CHEMICAL and Griffon.
Diversification Opportunities for KINGBOARD CHEMICAL and Griffon
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between KINGBOARD and Griffon is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding KINGBOARD CHEMICAL and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL 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 KINGBOARD CHEMICAL i.e., KINGBOARD CHEMICAL and Griffon go up and down completely randomly.
Pair Corralation between KINGBOARD CHEMICAL and Griffon
Assuming the 90 days trading horizon KINGBOARD CHEMICAL is expected to generate 3.24 times more return on investment than Griffon. However, KINGBOARD CHEMICAL is 3.24 times more volatile than Griffon. It trades about 0.16 of its potential returns per unit of risk. Griffon is currently generating about -0.3 per unit of risk. If you would invest 196.00 in KINGBOARD CHEMICAL on October 11, 2024 and sell it today you would earn a total of 28.00 from holding KINGBOARD CHEMICAL or generate 14.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KINGBOARD CHEMICAL vs. Griffon
Performance |
| Timeline |
| KINGBOARD CHEMICAL |
| Griffon |
KINGBOARD CHEMICAL and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KINGBOARD CHEMICAL and Griffon
The main advantage of trading using opposite KINGBOARD CHEMICAL and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KINGBOARD CHEMICAL 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.| KINGBOARD CHEMICAL vs. STMICROELECTRONICS | KINGBOARD CHEMICAL vs. Corporate Office Properties | KINGBOARD CHEMICAL vs. Samsung Electronics Co | KINGBOARD CHEMICAL vs. Benchmark Electronics |
| Griffon vs. KINGBOARD CHEMICAL | Griffon vs. Applied Materials | Griffon vs. TIANDE CHEMICAL | Griffon vs. Silicon Motion Technology |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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