Correlation Between Pinterest and Griffon

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

Diversification Opportunities for Pinterest and Griffon

PinterestGriffonDiversified AwayPinterestGriffonDiversified Away100%
-0.44
  Correlation Coefficient

Very good diversification

The 3 months correlation between Pinterest and Griffon is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pinterest and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Pinterest 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 Pinterest 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 Pinterest i.e., Pinterest and Griffon go up and down completely randomly.

Pair Corralation between Pinterest and Griffon

Given the investment horizon of 90 days Pinterest is expected to under-perform the Griffon. But the stock apears to be less risky and, when comparing its historical volatility, Pinterest is 1.09 times less risky than Griffon. The stock trades about -0.04 of its potential returns per unit of risk. The Griffon is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,879  in Griffon on October 16, 2024 and sell it today you would earn a total of  342.00  from holding Griffon or generate 4.97% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Pinterest  vs.  Griffon

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -1001020
JavaScript chart by amCharts 3.21.15PINS GFF
       Timeline  
Pinterest 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Pinterest has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan28293031323334
Griffon 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
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.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan6570758085

Pinterest and Griffon Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.34-3.25-2.16-1.07-0.01781.032.13.174.245.31 0.0400.0450.0500.055
JavaScript chart by amCharts 3.21.15PINS GFF
       Returns  

Pair Trading with Pinterest and Griffon

The main advantage of trading using opposite Pinterest and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pinterest 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 Pinterest 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.

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