Correlation Between Adient PLC and Griffon
Can any of the company-specific risk be diversified away by investing in both Adient PLC 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 Adient PLC and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Griffon, you can compare the effects of market volatilities on Adient PLC 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 Adient PLC with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Griffon.
Diversification Opportunities for Adient PLC and Griffon
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Adient and Griffon is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Adient PLC 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 Adient PLC 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 Adient PLC i.e., Adient PLC and Griffon go up and down completely randomly.
Pair Corralation between Adient PLC and Griffon
Given the investment horizon of 90 days Adient PLC is expected to under-perform the Griffon. In addition to that, Adient PLC is 1.18 times more volatile than Griffon. It trades about -0.16 of its total potential returns per unit of risk. Griffon is currently generating about -0.1 per unit of volatility. If you would invest 8,245 in Griffon on December 2, 2024 and sell it today you would lose (1,011) from holding Griffon or give up 12.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Adient PLC vs. Griffon
Performance |
Timeline |
Adient PLC |
Griffon |
Adient PLC and Griffon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Adient PLC and Griffon
The main advantage of trading using opposite Adient PLC and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC 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.Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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