Correlation Between International Paper and Griffon

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Can any of the company-specific risk be diversified away by investing in both International Paper 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 International Paper and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Paper and Griffon, you can compare the effects of market volatilities on International Paper 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 International Paper with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Paper and Griffon.

Diversification Opportunities for International Paper and Griffon

InternationalGriffonDiversified AwayInternationalGriffonDiversified Away100%
0.07
  Correlation Coefficient

Significant diversification

The 3 months correlation between International and Griffon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding International Paper and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and International Paper 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 International Paper 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 International Paper i.e., International Paper and Griffon go up and down completely randomly.

Pair Corralation between International Paper and Griffon

If you would invest  6,422  in Griffon on October 26, 2024 and sell it today you would earn a total of  1,362  from holding Griffon or generate 21.2% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy23.33%
ValuesDaily Returns

International Paper  vs.  Griffon

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510152025
JavaScript chart by amCharts 3.21.15INPAP GFF
       Timeline  
International Paper 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days International Paper has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, International Paper is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.
Griffon 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Griffon reported solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan6570758085

International Paper and Griffon Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.65-0.42-0.19-0.05920.0032250.07420.250.480.710.94 1234567
JavaScript chart by amCharts 3.21.15INPAP GFF
       Returns  

Pair Trading with International Paper and Griffon

The main advantage of trading using opposite International Paper and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Paper 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.
The idea behind International Paper and Griffon 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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