Correlation Between Griffon and Alpine 4

Can any of the company-specific risk be diversified away by investing in both Griffon and Alpine 4 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 Griffon and Alpine 4 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Griffon and Alpine 4 Holdings, you can compare the effects of market volatilities on Griffon and Alpine 4 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 Griffon with a short position of Alpine 4. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Alpine 4.

Diversification Opportunities for Griffon and Alpine 4

0.0

Correlation Coefficient

Griffon  Alpine 4

Pay attention - limited upside

The 3 months correlation between Griffon and Alpine is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Alpine 4 Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpine 4 Holdings and Griffon 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 Griffon are associated (or correlated) with Alpine 4. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpine 4 Holdings has no effect on the direction of Griffon i.e., Griffon and Alpine 4 go up and down completely randomly.

Pair Corralation between Griffon and Alpine 4

If you would invest  7,086  in Griffon on December 28, 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	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Griffon  vs.  Alpine 4 Holdings

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.

Alpine 4 Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alpine 4 Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Alpine 4 is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Griffon and Alpine 4

The main advantage of trading using opposite Griffon and Alpine 4 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Alpine 4 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 Alpine 4 will offset losses from the drop in Alpine 4's long position.

The idea behind Griffon and Alpine 4 Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.