Correlation Between Sekisui Chemical and Griffon
Can any of the company-specific risk be diversified away by investing in both Sekisui 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 Sekisui Chemical and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sekisui Chemical Co and Griffon, you can compare the effects of market volatilities on Sekisui 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 Sekisui Chemical with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sekisui Chemical and Griffon.
Diversification Opportunities for Sekisui Chemical and Griffon
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sekisui and Griffon is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sekisui Chemical Co and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Sekisui 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 Sekisui Chemical Co 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 Sekisui Chemical i.e., Sekisui Chemical and Griffon go up and down completely randomly.
Pair Corralation between Sekisui Chemical and Griffon
Assuming the 90 days horizon Sekisui Chemical is expected to generate 11.12 times less return on investment than Griffon. But when comparing it to its historical volatility, Sekisui Chemical Co is 6.59 times less risky than Griffon. It trades about 0.06 of its potential returns per unit of risk. Griffon is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,972 in Griffon on September 3, 2024 and sell it today you would earn a total of 4,294 from holding Griffon or generate 108.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sekisui Chemical Co vs. Griffon
Performance |
| Timeline |
| Sekisui Chemical |
| Griffon |
Sekisui Chemical and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sekisui Chemical and Griffon
The main advantage of trading using opposite Sekisui Chemical and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sekisui 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.| Sekisui Chemical vs. Grupo Bimbo SAB | Sekisui Chemical vs. Grupo Financiero Inbursa | Sekisui Chemical vs. Becle SA de | Sekisui Chemical 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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