Correlation Between Tandem Diabetes and Griffon
Can any of the company-specific risk be diversified away by investing in both Tandem Diabetes 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 Tandem Diabetes and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tandem Diabetes Care and Griffon, you can compare the effects of market volatilities on Tandem Diabetes 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 Tandem Diabetes with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tandem Diabetes and Griffon.
Diversification Opportunities for Tandem Diabetes and Griffon
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tandem and Griffon is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tandem Diabetes Care and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Tandem Diabetes 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 Tandem Diabetes Care 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 Tandem Diabetes i.e., Tandem Diabetes and Griffon go up and down completely randomly.
Pair Corralation between Tandem Diabetes and Griffon
Given the investment horizon of 90 days Tandem Diabetes is expected to generate 1.01 times less return on investment than Griffon. In addition to that, Tandem Diabetes is 1.54 times more volatile than Griffon. It trades about 0.05 of its total potential returns per unit of risk. Griffon is currently generating about 0.08 per unit of volatility. If you would invest 5,170 in Griffon on September 4, 2024 and sell it today you would earn a total of 3,112 from holding Griffon or generate 60.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tandem Diabetes Care vs. Griffon
Performance |
| Timeline |
| Tandem Diabetes Care |
| Griffon |
Tandem Diabetes and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tandem Diabetes and Griffon
The main advantage of trading using opposite Tandem Diabetes and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tandem Diabetes 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.| Tandem Diabetes vs. DexCom Inc | Tandem Diabetes vs. Inspire Medical Systems | Tandem Diabetes vs. Penumbra | Tandem Diabetes vs. Insulet |
| 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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