Correlation Between 89832QAE9 and Griffon

Can any of the company-specific risk be diversified away by investing in both 89832QAE9 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 89832QAE9 and Griffon into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TFC 495 and Griffon, you can compare the effects of market volatilities on 89832QAE9 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 89832QAE9 with a short position of Griffon. Check out your portfolio center. Please also check ongoing floating volatility patterns of 89832QAE9 and Griffon.

Diversification Opportunities for 89832QAE9 and Griffon

-0.11

Correlation Coefficient

89832QAE9  Griffon

Good diversification

The 3 months correlation between 89832QAE9 and Griffon is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding TFC 495 and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and 89832QAE9 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 TFC 495 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 89832QAE9 i.e., 89832QAE9 and Griffon go up and down completely randomly.

Pair Corralation between 89832QAE9 and Griffon

Assuming the 90 days trading horizon TFC 495 is expected to under-perform the Griffon. But the bond apears to be less risky and, when comparing its historical volatility, TFC 495 is 6.31 times less risky than Griffon. The bond trades about -0.06 of its potential returns per unit of risk. The Griffon is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  6,669  in Griffon on September 13, 2024 and sell it today you would earn a total of  1,338  from holding Griffon or generate 20.06% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

TFC 495  vs.  Griffon

89832QAE9

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TFC 495 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 89832QAE9 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

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 8 (%) 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 89832QAE9 and Griffon

The main advantage of trading using opposite 89832QAE9 and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 89832QAE9 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 TFC 495 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.