Correlation Between Griffon and Roadzen

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

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

Diversification Opportunities for Griffon and Roadzen

0.1

Correlation Coefficient

Griffon  Roadzen

Average diversification

The 3 months correlation between Griffon and Roadzen is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Roadzen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roadzen 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 Roadzen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roadzen has no effect on the direction of Griffon i.e., Griffon and Roadzen go up and down completely randomly.

Pair Corralation between Griffon and Roadzen

Considering the 90-day investment horizon Griffon is expected to generate 0.24 times more return on investment than Roadzen. However, Griffon is 4.12 times less risky than Roadzen. It trades about 0.0 of its potential returns per unit of risk. Roadzen is currently generating about -0.12 per unit of risk. If you would invest  7,244  in Griffon on December 21, 2024 and sell it today you would lose (93.00) from holding Griffon or give up 1.28% of portfolio value over 90 days.

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

Griffon  vs.  Roadzen

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.

Roadzen

Risk-Adjusted Performance

Very Weak

Over the last 90 days Roadzen has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Griffon and Roadzen

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

The idea behind Griffon and Roadzen 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.