Correlation Between Griffon and Apogee Enterprises

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

By analyzing existing cross correlation between Griffon and Apogee Enterprises, you can compare the effects of market volatilities on Griffon and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and Apogee Enterprises.

Diversification Opportunities for Griffon and Apogee Enterprises

0.5

Correlation Coefficient

Griffon  Apogee Enterprises

Very weak diversification

The 3 months correlation between Griffon and Apogee is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Griffon i.e., Griffon and Apogee Enterprises go up and down completely randomly.

Pair Corralation between Griffon and Apogee Enterprises

Considering the 90-day investment horizon Griffon is expected to generate 1.22 times more return on investment than Apogee Enterprises. However, Griffon is 1.22 times more volatile than Apogee Enterprises. It trades about 0.08 of its potential returns per unit of risk. Apogee Enterprises is currently generating about 0.06 per unit of risk. If you would invest  3,304  in Griffon on September 24, 2024 and sell it today you would earn a total of  3,958  from holding Griffon or generate 119.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Griffon  vs.  Apogee Enterprises

Griffon

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 2 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Apogee Enterprises

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Apogee Enterprises are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Apogee Enterprises may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Griffon and Apogee Enterprises

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

The idea behind Griffon and Apogee Enterprises 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.