Correlation Between Seven West and Griffon
Can any of the company-specific risk be diversified away by investing in both Seven West 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 Seven West and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Seven West Media and Griffon, you can compare the effects of market volatilities on Seven West 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 Seven West with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Seven West and Griffon.
Diversification Opportunities for Seven West and Griffon
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Seven and Griffon is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Seven West Media and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Seven West 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 Seven West Media 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 Seven West i.e., Seven West and Griffon go up and down completely randomly.
Pair Corralation between Seven West and Griffon
Assuming the 90 days horizon Seven West Media is expected to under-perform the Griffon. In addition to that, Seven West is 1.67 times more volatile than Griffon. It trades about -0.04 of its total potential returns per unit of risk. Griffon is currently generating about 0.09 per unit of volatility. If you would invest 2,932 in Griffon on September 19, 2024 and sell it today you would earn a total of 4,518 from holding Griffon or generate 154.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Seven West Media vs. Griffon
Performance |
| Timeline |
| Seven West Media |
| Griffon |
Seven West and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Seven West and Griffon
The main advantage of trading using opposite Seven West and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Seven West 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.| Seven West vs. Live Nation Entertainment | Seven West vs. Toho Co | Seven West vs. Superior Plus Corp | Seven West vs. NMI Holdings |
| Griffon vs. Sunny Optical Technology | Griffon vs. Tencent Music Entertainment | Griffon vs. Vishay Intertechnology | Griffon vs. Casio Computer CoLtd |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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