Correlation Between NESNVX and Griffon

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

By analyzing existing cross correlation between NESNVX 3625 24 SEP 28 and Griffon, you can compare the effects of market volatilities on NESNVX 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 NESNVX with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of NESNVX and Griffon.

Diversification Opportunities for NESNVX and Griffon

0.15

Correlation Coefficient

NESNVX  Griffon

Average diversification

The 3 months correlation between NESNVX and Griffon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding NESNVX 3625 24 SEP 28 and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and NESNVX 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 NESNVX 3625 24 SEP 28 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 NESNVX i.e., NESNVX and Griffon go up and down completely randomly.

Pair Corralation between NESNVX and Griffon

Assuming the 90 days trading horizon NESNVX 3625 24 SEP 28 is expected to generate 0.13 times more return on investment than Griffon. However, NESNVX 3625 24 SEP 28 is 7.57 times less risky than Griffon. It trades about 0.05 of its potential returns per unit of risk. Griffon is currently generating about -0.01 per unit of risk. If you would invest  9,624  in NESNVX 3625 24 SEP 28 on December 11, 2024 and sell it today you would earn a total of  36.00  from holding NESNVX 3625 24 SEP 28 or generate 0.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	70.0%
Values	Daily Returns

NESNVX 3625 24 SEP 28  vs.  Griffon

NESNVX 3625 24

Risk-Adjusted Performance

Very Weak

Over the last 90 days NESNVX 3625 24 SEP 28 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, NESNVX is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 weak performance in the last few months, the Stock's technical and fundamental indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with NESNVX and Griffon

The main advantage of trading using opposite NESNVX and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NESNVX 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 NESNVX 3625 24 SEP 28 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.