Correlation Between Boston Beer and Griffon
Can any of the company-specific risk be diversified away by investing in both Boston Beer 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 Boston Beer and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Beer and Griffon, you can compare the effects of market volatilities on Boston Beer 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 Boston Beer with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Beer and Griffon.
Diversification Opportunities for Boston Beer and Griffon
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Boston and Griffon is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Boston Beer and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Boston Beer 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 Boston Beer 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 Boston Beer i.e., Boston Beer and Griffon go up and down completely randomly.
Pair Corralation between Boston Beer and Griffon
Considering the 90-day investment horizon Boston Beer is expected to under-perform the Griffon. But the stock apears to be less risky and, when comparing its historical volatility, Boston Beer is 1.09 times less risky than Griffon. The stock trades about 0.0 of its potential returns per unit of risk. The Griffon is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,334 in Griffon on September 3, 2024 and sell it today you would earn a total of 5,096 from holding Griffon or generate 152.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Boston Beer vs. Griffon
Performance |
| Timeline |
| Boston Beer |
| Griffon |
Boston Beer and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Beer and Griffon
The main advantage of trading using opposite Boston Beer and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Beer 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.| Boston Beer vs. Anheuser Busch Inbev | Boston Beer vs. Molson Coors Beverage | Boston Beer vs. Heineken NV | Boston Beer vs. Ambev SA ADR |
| 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |