Correlation Between Griffon and DIC

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

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

Diversification Opportunities for Griffon and DIC

0.0

Correlation Coefficient

Griffon  DIC

Pay attention - limited upside

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

Pair Corralation between Griffon and DIC

If you would invest (100.00) in DIC Corporation on December 18, 2024 and sell it today you would earn a total of  100.00  from holding DIC Corporation or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Griffon  vs.  DIC Corp.

Griffon

Risk-Adjusted Performance

Very Weak

Over the last 90 days Griffon has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

DIC Corporation

Risk-Adjusted Performance

Very Weak

Over the last 90 days DIC Corporation has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, DIC is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Griffon and DIC

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

The idea behind Griffon and DIC Corporation 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.