Correlation Between Marubeni and Griffon
Can any of the company-specific risk be diversified away by investing in both Marubeni 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 Marubeni and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marubeni and Griffon, you can compare the effects of market volatilities on Marubeni 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 Marubeni with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marubeni and Griffon.
Diversification Opportunities for Marubeni and Griffon
Significant diversification
The 3 months correlation between Marubeni and Griffon is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Marubeni and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Marubeni 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 Marubeni 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 Marubeni i.e., Marubeni and Griffon go up and down completely randomly.
Pair Corralation between Marubeni and Griffon
Assuming the 90 days horizon Marubeni is expected to generate 2.97 times less return on investment than Griffon. But when comparing it to its historical volatility, Marubeni is 1.09 times less risky than Griffon. It trades about 0.11 of its potential returns per unit of risk. Griffon is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 6,339 in Griffon on September 3, 2024 and sell it today you would earn a total of 1,927 from holding Griffon or generate 30.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Marubeni vs. Griffon
Performance |
| Timeline |
| Marubeni |
| Griffon |
Marubeni and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Marubeni and Griffon
The main advantage of trading using opposite Marubeni and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marubeni 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.| Marubeni vs. Grupo Bimbo SAB | Marubeni vs. Grupo Financiero Inbursa | Marubeni vs. Becle SA de | Marubeni vs. HUMANA INC |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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