Correlation Between Griffon and 482480AM2

Can any of the company-specific risk be diversified away by investing in both Griffon and 482480AM2 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 482480AM2 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Griffon and KLAC 495 15 JUL 52, you can compare the effects of market volatilities on Griffon and 482480AM2 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 482480AM2. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and 482480AM2.

Diversification Opportunities for Griffon and 482480AM2

-0.15

Correlation Coefficient

Griffon  482480AM2

Good diversification

The 3 months correlation between Griffon and 482480AM2 is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and KLAC 495 15 JUL 52 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KLAC 495 15 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 482480AM2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KLAC 495 15 has no effect on the direction of Griffon i.e., Griffon and 482480AM2 go up and down completely randomly.

Pair Corralation between Griffon and 482480AM2

Considering the 90-day investment horizon Griffon is expected to generate 1.8 times more return on investment than 482480AM2. However, Griffon is 1.8 times more volatile than KLAC 495 15 JUL 52. It trades about 0.07 of its potential returns per unit of risk. KLAC 495 15 JUL 52 is currently generating about -0.01 per unit of risk. If you would invest  3,520  in Griffon on October 10, 2024 and sell it today you would earn a total of  3,542  from holding Griffon or generate 100.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.74%
Values	Daily Returns

Griffon  vs.  KLAC 495 15 JUL 52

Griffon

Risk-Adjusted Performance

3 of 100

Weak

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

KLAC 495 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days KLAC 495 15 JUL 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for KLAC 495 15 JUL 52 investors.

Pair Trading with Griffon and 482480AM2

The main advantage of trading using opposite Griffon and 482480AM2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, 482480AM2 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 482480AM2 will offset losses from the drop in 482480AM2's long position.

The idea behind Griffon and KLAC 495 15 JUL 52 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.