Correlation Between United States and Griffon
Can any of the company-specific risk be diversified away by investing in both United States 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 United States and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Griffon, you can compare the effects of market volatilities on United States 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 United States with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Griffon.
Diversification Opportunities for United States and Griffon
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Griffon is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and United States 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 United States Steel 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 United States i.e., United States and Griffon go up and down completely randomly.
Pair Corralation between United States and Griffon
Taking into account the 90-day investment horizon United States is expected to generate 2.59 times less return on investment than Griffon. In addition to that, United States is 1.03 times more volatile than Griffon. It trades about 0.04 of its total potential returns per unit of risk. Griffon is currently generating about 0.1 per unit of volatility. If you would invest 4,237 in Griffon on September 4, 2024 and sell it today you would earn a total of 4,029 from holding Griffon or generate 95.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Griffon
Performance |
| Timeline |
| United States Steel |
| Griffon |
United States and Griffon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Griffon
The main advantage of trading using opposite United States and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States 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.| United States vs. Constellium Nv | United States vs. Century Aluminum | United States vs. China Hongqiao Group | United States vs. Kaiser Aluminum |
| 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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