Correlation Between WAVS Old and Griffon

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

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

Diversification Opportunities for WAVS Old and Griffon

0.0

Correlation Coefficient

WAVS Old  Griffon

Pay attention - limited upside

The 3 months correlation between WAVS and Griffon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding WAVS Old and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and WAVS Old 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 WAVS Old 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 WAVS Old i.e., WAVS Old and Griffon go up and down completely randomly.

Pair Corralation between WAVS Old and Griffon

If you would invest  7,086  in Griffon on December 29, 2024 and sell it today you would earn a total of  110.00  from holding Griffon or generate 1.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

WAVS Old  vs.  Griffon

WAVS Old

Risk-Adjusted Performance

Very Weak

Over the last 90 days WAVS Old has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, WAVS Old is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Griffon

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 WAVS Old and Griffon

The main advantage of trading using opposite WAVS Old and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WAVS Old 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 WAVS Old 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.