Correlation Between Hudson Pacific and Griffon
Can any of the company-specific risk be diversified away by investing in both Hudson Pacific and Griffon 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 Hudson Pacific and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hudson Pacific Properties and Griffon, you can compare the effects of market volatilities on Hudson Pacific and Griffon 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 Hudson Pacific with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hudson Pacific and Griffon.
Diversification Opportunities for Hudson Pacific and Griffon
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Hudson and Griffon is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Hudson Pacific Properties and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Hudson Pacific 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 Hudson Pacific Properties are associated (or correlated) with Griffon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Griffon has no effect on the direction of Hudson Pacific i.e., Hudson Pacific and Griffon go up and down completely randomly.
Pair Corralation between Hudson Pacific and Griffon
Considering the 90-day investment horizon Hudson Pacific Properties is expected to under-perform the Griffon. In addition to that, Hudson Pacific is 1.58 times more volatile than Griffon. It trades about -0.02 of its total potential returns per unit of risk. Griffon is currently generating about 0.09 per unit of volatility. If you would invest 3,207 in Griffon on September 6, 2024 and sell it today you would earn a total of 5,073 from holding Griffon or generate 158.19% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hudson Pacific Properties vs. Griffon
Performance |
Timeline |
Hudson Pacific Properties |
Griffon |
Hudson Pacific and Griffon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hudson Pacific and Griffon
The main advantage of trading using opposite Hudson Pacific and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hudson Pacific position performs unexpectedly, Griffon 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 Griffon will offset losses from the drop in Griffon's long position.Hudson Pacific vs. Kilroy Realty Corp | Hudson Pacific vs. Highwoods Properties | Hudson Pacific vs. Cousins Properties Incorporated | Hudson Pacific vs. Piedmont Office Realty |
Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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