Correlation Between SolarWorld Aktiengesellscha and Griffon
Can any of the company-specific risk be diversified away by investing in both SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SolarWorld Aktiengesellschaft and Griffon, you can compare the effects of market volatilities on SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellscha with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of SolarWorld Aktiengesellscha and Griffon.
Diversification Opportunities for SolarWorld Aktiengesellscha and Griffon
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SolarWorld and Griffon is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding SolarWorld Aktiengesellschaft and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and SolarWorld Aktiengesellscha 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 SolarWorld Aktiengesellschaft 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 SolarWorld Aktiengesellscha i.e., SolarWorld Aktiengesellscha and Griffon go up and down completely randomly.
Pair Corralation between SolarWorld Aktiengesellscha and Griffon
Assuming the 90 days horizon SolarWorld Aktiengesellschaft is expected to generate 23.89 times more return on investment than Griffon. However, SolarWorld Aktiengesellscha is 23.89 times more volatile than Griffon. It trades about 0.06 of its potential returns per unit of risk. Griffon is currently generating about 0.07 per unit of risk. If you would invest 20.00 in SolarWorld Aktiengesellschaft on September 12, 2024 and sell it today you would lose (19.92) from holding SolarWorld Aktiengesellschaft or give up 99.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SolarWorld Aktiengesellschaft vs. Griffon
Performance |
| Timeline |
| SolarWorld Aktiengesellscha |
| Griffon |
SolarWorld Aktiengesellscha and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SolarWorld Aktiengesellscha and Griffon
The main advantage of trading using opposite SolarWorld Aktiengesellscha and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SolarWorld Aktiengesellscha 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.| SolarWorld Aktiengesellscha vs. Griffon | SolarWorld Aktiengesellscha vs. HUTCHMED DRC | SolarWorld Aktiengesellscha vs. Avient Corp | SolarWorld Aktiengesellscha vs. Flexible Solutions International |
| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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