Correlation Between NYSE Composite and Griffon
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Griffon, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Griffon.
Diversification Opportunities for NYSE Composite and Griffon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Griffon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Griffon go up and down completely randomly.
Pair Corralation between NYSE Composite and Griffon
Assuming the 90 days trading horizon NYSE Composite is expected to generate 4.09 times less return on investment than Griffon. But when comparing it to its historical volatility, NYSE Composite is 3.45 times less risky than Griffon. It trades about 0.07 of its potential returns per unit of risk. Griffon is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,191 in Griffon on August 24, 2024 and sell it today you would earn a total of 4,937 from holding Griffon or generate 154.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Griffon
Performance |
| Timeline |
NYSE Composite and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Griffon
Pair trading matchups for Griffon
Pair Trading with NYSE Composite and Griffon
The main advantage of trading using opposite NYSE Composite and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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