Correlation Between Sapiens International and Griffon
Can any of the company-specific risk be diversified away by investing in both Sapiens International 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 Sapiens International and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapiens International and Griffon, you can compare the effects of market volatilities on Sapiens International 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 Sapiens International with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapiens International and Griffon.
Diversification Opportunities for Sapiens International and Griffon
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sapiens and Griffon is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sapiens International and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Sapiens International 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 Sapiens International 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 Sapiens International i.e., Sapiens International and Griffon go up and down completely randomly.
Pair Corralation between Sapiens International and Griffon
Given the investment horizon of 90 days Sapiens International is expected to under-perform the Griffon. In addition to that, Sapiens International is 1.25 times more volatile than Griffon. It trades about -0.09 of its total potential returns per unit of risk. Griffon is currently generating about 0.17 per unit of volatility. If you would invest 6,270 in Griffon on September 2, 2024 and sell it today you would earn a total of 2,160 from holding Griffon or generate 34.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapiens International vs. Griffon
Performance |
| Timeline |
| Sapiens International |
| Griffon |
Sapiens International and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapiens International and Griffon
The main advantage of trading using opposite Sapiens International and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapiens International 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.| Sapiens International vs. PROS Holdings | Sapiens International vs. Meridianlink | Sapiens International vs. Enfusion | Sapiens International vs. PDF Solutions |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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