Correlation Between Griffon and AAON

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

By analyzing existing cross correlation between Griffon and AAON Inc, you can compare the effects of market volatilities on Griffon and AAON 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 AAON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Griffon and AAON.

Diversification Opportunities for Griffon and AAON

-0.4

Correlation Coefficient

Griffon  AAON

Very good diversification

The 3 months correlation between Griffon and AAON is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Griffon and AAON Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AAON Inc 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 AAON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AAON Inc has no effect on the direction of Griffon i.e., Griffon and AAON go up and down completely randomly.

Pair Corralation between Griffon and AAON

Considering the 90-day investment horizon Griffon is expected to generate 0.63 times more return on investment than AAON. However, Griffon is 1.59 times less risky than AAON. It trades about 0.13 of its potential returns per unit of risk. AAON Inc is currently generating about -0.07 per unit of risk. If you would invest  6,948  in Griffon on May 6, 2025 and sell it today you would earn a total of  1,129  from holding Griffon or generate 16.25% return on investment over 90 days.

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

Griffon  vs.  AAON Inc

Griffon

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Griffon are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal technical and fundamental indicators, Griffon reported solid returns over the last few months and may actually be approaching a breakup point.

AAON Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AAON Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in September 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Griffon and AAON

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

The idea behind Griffon and AAON Inc 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.