Correlation Between Suntory Beverage and Griffon
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Griffon, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Griffon.
Diversification Opportunities for Suntory Beverage and Griffon
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Suntory and Griffon is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and Griffon go up and down completely randomly.
Pair Corralation between Suntory Beverage and Griffon
Assuming the 90 days horizon Suntory Beverage is expected to generate 22.68 times less return on investment than Griffon. But when comparing it to its historical volatility, Suntory Beverage Food is 1.64 times less risky than Griffon. It trades about 0.01 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 3,334 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Griffon
Performance |
| Timeline |
| Suntory Beverage Food |
| Griffon |
Suntory Beverage and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Griffon
The main advantage of trading using opposite Suntory Beverage and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Secom Co Ltd | Suntory Beverage vs. Mitsubishi Estate Co | Suntory Beverage vs. Shimano Inc ADR | Suntory Beverage vs. Sumitomo Chemical Co |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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