Correlation Between Tyson Foods and Griffon
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Griffon, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Griffon.
Diversification Opportunities for Tyson Foods and Griffon
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tyson and Griffon is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Griffon go up and down completely randomly.
Pair Corralation between Tyson Foods and Griffon
Assuming the 90 days trading horizon Tyson Foods is expected to generate 0.85 times more return on investment than Griffon. However, Tyson Foods is 1.18 times less risky than Griffon. It trades about -0.36 of its potential returns per unit of risk. Griffon is currently generating about -0.48 per unit of risk. If you would invest 6,008 in Tyson Foods on September 28, 2024 and sell it today you would lose (490.00) from holding Tyson Foods or give up 8.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Griffon
Performance |
| Timeline |
| Tyson Foods |
| Griffon |
Tyson Foods and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Griffon
The main advantage of trading using opposite Tyson Foods and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Archer Daniels Midland | Tyson Foods vs. MOWI ASA SPADR | Tyson Foods vs. Mowi ASA | Tyson Foods vs. PT Charoen Pokphand |
| Griffon vs. Honeywell International | Griffon vs. Mitsubishi | Griffon vs. CITIC Limited | Griffon vs. CITIC LTD ADR5 |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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