Correlation Between Cresud SACIF and Griffon

Can any of the company-specific risk be diversified away by investing in both Cresud SACIF 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 Cresud SACIF and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cresud SACIF y and Griffon, you can compare the effects of market volatilities on Cresud SACIF 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 Cresud SACIF with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cresud SACIF and Griffon.

Diversification Opportunities for Cresud SACIF and Griffon

0.34

Correlation Coefficient

Cresud SACIF  Griffon

Weak diversification

The 3 months correlation between Cresud and Griffon is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Cresud SACIF y and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Cresud SACIF 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 Cresud SACIF y 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 Cresud SACIF i.e., Cresud SACIF and Griffon go up and down completely randomly.

Pair Corralation between Cresud SACIF and Griffon

Assuming the 90 days horizon Cresud SACIF y is expected to under-perform the Griffon. In addition to that, Cresud SACIF is 2.57 times more volatile than Griffon. It trades about -0.03 of its total potential returns per unit of risk. Griffon is currently generating about 0.02 per unit of volatility. If you would invest  7,086  in Griffon on December 29, 2024 and sell it today you would earn a total of  110.00  from holding Griffon or generate 1.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Cresud SACIF y  vs.  Griffon

Cresud SACIF y

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cresud SACIF y has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Griffon

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Griffon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Cresud SACIF and Griffon

The main advantage of trading using opposite Cresud SACIF and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cresud SACIF 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.

The idea behind Cresud SACIF y and Griffon pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.