Correlation Between Griffon and JPMORGAN

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

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

Diversification Opportunities for Griffon and JPMORGAN

-0.25

Correlation Coefficient

Griffon  JPMORGAN

Very good diversification

The 3 months correlation between Griffon and JPMORGAN is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and JPMORGAN CHASE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JPMORGAN CHASE CO 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 JPMORGAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JPMORGAN CHASE CO has no effect on the direction of Griffon i.e., Griffon and JPMORGAN go up and down completely randomly.

Pair Corralation between Griffon and JPMORGAN

Considering the 90-day investment horizon Griffon is expected to under-perform the JPMORGAN. In addition to that, Griffon is 6.38 times more volatile than JPMORGAN CHASE CO. It trades about -0.01 of its total potential returns per unit of risk. JPMORGAN CHASE CO is currently generating about 0.13 per unit of volatility. If you would invest  8,571  in JPMORGAN CHASE CO on December 23, 2024 and sell it today you would earn a total of  217.00  from holding JPMORGAN CHASE CO or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.39%
Values	Daily Returns

Griffon  vs.  JPMORGAN CHASE CO

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.

JPMORGAN CHASE CO

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in JPMORGAN CHASE CO are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, JPMORGAN is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Griffon and JPMORGAN

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

The idea behind Griffon and JPMORGAN CHASE CO 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.

Check out your portfolio center.

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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.