Correlation Between Kinetik Holdings and Griffon

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

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

Diversification Opportunities for Kinetik Holdings and Griffon

0.73

Correlation Coefficient

Kinetik Holdings  Griffon

Poor diversification

The 3 months correlation between Kinetik and Griffon is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kinetik Holdings and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Kinetik Holdings 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 Kinetik Holdings 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 Kinetik Holdings i.e., Kinetik Holdings and Griffon go up and down completely randomly.

Pair Corralation between Kinetik Holdings and Griffon

Given the investment horizon of 90 days Kinetik Holdings is expected to under-perform the Griffon. In addition to that, Kinetik Holdings is 1.13 times more volatile than Griffon. It trades about -0.03 of its total potential returns per unit of risk. Griffon is currently generating about 0.0 per unit of volatility. If you would invest  7,266  in Griffon on December 20, 2024 and sell it today you would lose (81.00) from holding Griffon or give up 1.11% of portfolio value over 90 days.

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

Kinetik Holdings  vs.  Griffon

Kinetik Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetik Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Kinetik Holdings is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Kinetik Holdings and Griffon

The main advantage of trading using opposite Kinetik Holdings and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kinetik Holdings 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 Kinetik Holdings 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.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.