Correlation Between Multi Ways and Griffon

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

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

Diversification Opportunities for Multi Ways and Griffon

-0.14

Correlation Coefficient

Multi Ways  Griffon

Good diversification

The 3 months correlation between Multi and Griffon is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Multi Ways Holdings and Griffon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Griffon and Multi Ways 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 Multi Ways 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 Multi Ways i.e., Multi Ways and Griffon go up and down completely randomly.

Pair Corralation between Multi Ways and Griffon

Considering the 90-day investment horizon Multi Ways Holdings is expected to under-perform the Griffon. In addition to that, Multi Ways is 1.29 times more volatile than Griffon. It trades about -0.11 of its total potential returns per unit of risk. Griffon is currently generating about 0.05 per unit of volatility. If you would invest  6,652  in Griffon on February 22, 2024 and sell it today you would earn a total of  133.00  from holding Griffon or generate 2.0% return on investment over 90 days.

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

Multi Ways Holdings  vs.  Griffon

Multi Ways Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Multi Ways Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Multi Ways may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Griffon

Risk-Adjusted Performance

1 of 100

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 Multi Ways and Griffon

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