Correlation Between World Kinect and Griffon
Can any of the company-specific risk be diversified away by investing in both World Kinect 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 World Kinect and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Kinect and Griffon, you can compare the effects of market volatilities on World Kinect 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 World Kinect with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Kinect and Griffon.
Diversification Opportunities for World Kinect and Griffon
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between World and Griffon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding World Kinect and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and World Kinect 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 World Kinect 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 World Kinect i.e., World Kinect and Griffon go up and down completely randomly.
Pair Corralation between World Kinect and Griffon
Considering the 90-day investment horizon World Kinect is expected to generate 0.94 times more return on investment than Griffon. However, World Kinect is 1.07 times less risky than Griffon. It trades about 0.05 of its potential returns per unit of risk. Griffon is currently generating about 0.04 per unit of risk. If you would invest 2,757 in World Kinect on December 27, 2024 and sell it today you would earn a total of 121.50 from holding World Kinect or generate 4.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.36% |
Values | Daily Returns |
World Kinect vs. Griffon
Performance |
Timeline |
World Kinect |
Griffon |
World Kinect and Griffon Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with World Kinect and Griffon
The main advantage of trading using opposite World Kinect and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Kinect 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.World Kinect vs. Unilever PLC ADR | World Kinect vs. Asure Software | World Kinect vs. Paysafe | World Kinect vs. Hillman Solutions Corp |
Griffon vs. Steel Partners Holdings | Griffon vs. Brookfield Business Partners | Griffon vs. Tejon Ranch Co | Griffon vs. Compass Diversified Holdings |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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