Correlation Between Cannae Holdings and Griffon
Can any of the company-specific risk be diversified away by investing in both Cannae Holdings 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 Cannae Holdings and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cannae Holdings and Griffon, you can compare the effects of market volatilities on Cannae Holdings 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 Cannae Holdings with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cannae Holdings and Griffon.
Diversification Opportunities for Cannae Holdings and Griffon
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cannae and Griffon is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Cannae Holdings and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Cannae Holdings 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 Cannae Holdings 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 Cannae Holdings i.e., Cannae Holdings and Griffon go up and down completely randomly.
Pair Corralation between Cannae Holdings and Griffon
Given the investment horizon of 90 days Cannae Holdings is expected to generate 0.61 times more return on investment than Griffon. However, Cannae Holdings is 1.64 times less risky than Griffon. It trades about -0.08 of its potential returns per unit of risk. Griffon is currently generating about -0.07 per unit of risk. If you would invest 1,949 in Cannae Holdings on December 5, 2024 and sell it today you would lose (57.00) from holding Cannae Holdings or give up 2.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Cannae Holdings vs. Griffon
Performance |
Timeline |
Cannae Holdings |
Griffon |
Cannae Holdings and Griffon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Cannae Holdings and Griffon
The main advantage of trading using opposite Cannae Holdings and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cannae Holdings 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.Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
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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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