Correlation Between ULTRA CLEAN and Griffon
Can any of the company-specific risk be diversified away by investing in both ULTRA CLEAN 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 ULTRA CLEAN and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ULTRA CLEAN HLDGS and Griffon, you can compare the effects of market volatilities on ULTRA CLEAN 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 ULTRA CLEAN with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of ULTRA CLEAN and Griffon.
Diversification Opportunities for ULTRA CLEAN and Griffon
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ULTRA and Griffon is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding ULTRA CLEAN HLDGS and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and ULTRA CLEAN 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 ULTRA CLEAN HLDGS 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 ULTRA CLEAN i.e., ULTRA CLEAN and Griffon go up and down completely randomly.
Pair Corralation between ULTRA CLEAN and Griffon
Assuming the 90 days trading horizon ULTRA CLEAN HLDGS is expected to under-perform the Griffon. In addition to that, ULTRA CLEAN is 2.07 times more volatile than Griffon. It trades about -0.1 of its total potential returns per unit of risk. Griffon is currently generating about -0.12 per unit of volatility. If you would invest 7,850 in Griffon on October 30, 2024 and sell it today you would lose (550.00) from holding Griffon or give up 7.01% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.37% |
| Values | Daily Returns |
ULTRA CLEAN HLDGS vs. Griffon
Performance |
| Timeline |
| ULTRA CLEAN HLDGS |
| Griffon |
ULTRA CLEAN and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ULTRA CLEAN and Griffon
The main advantage of trading using opposite ULTRA CLEAN and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ULTRA CLEAN 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.| ULTRA CLEAN vs. Vulcan Materials | ULTRA CLEAN vs. GOODYEAR T RUBBER | ULTRA CLEAN vs. United Breweries Co | ULTRA CLEAN vs. Plastic Omnium |
| Griffon vs. Information Services International Dentsu | Griffon vs. BJs Restaurants | Griffon vs. COSMOSTEEL HLDGS | Griffon vs. Olympic Steel |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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