Correlation Between Paysafe and Griffon

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

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

Diversification Opportunities for Paysafe and Griffon

-0.69

Correlation Coefficient

Paysafe  Griffon

Excellent diversification

The 3 months correlation between Paysafe and Griffon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Paysafe and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Paysafe 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 Paysafe 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 Paysafe i.e., Paysafe and Griffon go up and down completely randomly.

Pair Corralation between Paysafe and Griffon

Given the investment horizon of 90 days Paysafe is expected to under-perform the Griffon. In addition to that, Paysafe is 1.35 times more volatile than Griffon. It trades about -0.04 of its total potential returns per unit of risk. Griffon is currently generating about 0.13 per unit of volatility. If you would invest  6,466  in Griffon on September 12, 2024 and sell it today you would earn a total of  1,541  from holding Griffon or generate 23.83% return on investment over 90 days.

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

Paysafe  vs.  Griffon

Paysafe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Paysafe has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Griffon

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 10 (%) 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.

Pair Trading with Paysafe and Griffon

The main advantage of trading using opposite Paysafe and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Paysafe 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 Paysafe 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 CEOs Directory module to screen CEOs from public companies around the world.