Correlation Between Griffon and Oceantech Acquisitions

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

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

Diversification Opportunities for Griffon and Oceantech Acquisitions

0.06

Correlation Coefficient

Griffon  Oceantech Acquisitions

Significant diversification

The 3 months correlation between Griffon and Oceantech is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and Oceantech Acquisitions I in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oceantech Acquisitions and Griffon 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 Griffon are associated (or correlated) with Oceantech Acquisitions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oceantech Acquisitions has no effect on the direction of Griffon i.e., Griffon and Oceantech Acquisitions go up and down completely randomly.

Pair Corralation between Griffon and Oceantech Acquisitions

If you would invest  6,745  in Griffon on September 17, 2024 and sell it today you would earn a total of  1,104  from holding Griffon or generate 16.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Griffon  vs.  Oceantech Acquisitions I

Griffon

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical and fundamental indicators, Griffon reported solid returns over the last few months and may actually be approaching a breakup point.

Oceantech Acquisitions

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Griffon and Oceantech Acquisitions

The main advantage of trading using opposite Griffon and Oceantech Acquisitions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Griffon position performs unexpectedly, Oceantech Acquisitions 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 Oceantech Acquisitions will offset losses from the drop in Oceantech Acquisitions' long position.

The idea behind Griffon and Oceantech Acquisitions I 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.