Correlation Between Mondee Holdings and Griffon

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

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

Diversification Opportunities for Mondee Holdings and Griffon

-0.19

Correlation Coefficient

Mondee Holdings  Griffon

Good diversification

The 3 months correlation between Mondee and Griffon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Mondee Holdings and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Mondee Holdings 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 Mondee Holdings 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 Mondee Holdings i.e., Mondee Holdings and Griffon go up and down completely randomly.

Pair Corralation between Mondee Holdings and Griffon

Given the investment horizon of 90 days Mondee Holdings is expected to generate 2.35 times more return on investment than Griffon. However, Mondee Holdings is 2.35 times more volatile than Griffon. It trades about -0.03 of its potential returns per unit of risk. Griffon is currently generating about -0.15 per unit of risk. If you would invest  231.00  in Mondee Holdings on January 28, 2024 and sell it today you would lose (12.00) from holding Mondee Holdings or give up 5.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Mondee Holdings  vs.  Griffon

Mondee Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mondee Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

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 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 Mondee Holdings and Griffon

The main advantage of trading using opposite Mondee Holdings and Griffon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mondee Holdings 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 Mondee Holdings 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 Global Correlations module to find global opportunities by holding instruments from different markets.