Correlation Between INVITATION HOMES and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both INVITATION HOMES and DFS Furniture 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 INVITATION HOMES and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INVITATION HOMES DL and DFS Furniture PLC, you can compare the effects of market volatilities on INVITATION HOMES and DFS Furniture 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 INVITATION HOMES with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of INVITATION HOMES and DFS Furniture.
Diversification Opportunities for INVITATION HOMES and DFS Furniture
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INVITATION and DFS is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding INVITATION HOMES DL and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC and INVITATION HOMES 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 INVITATION HOMES DL are associated (or correlated) with DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of INVITATION HOMES i.e., INVITATION HOMES and DFS Furniture go up and down completely randomly.
Pair Corralation between INVITATION HOMES and DFS Furniture
Assuming the 90 days horizon INVITATION HOMES DL is expected to generate 0.91 times more return on investment than DFS Furniture. However, INVITATION HOMES DL is 1.1 times less risky than DFS Furniture. It trades about 0.13 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.01 per unit of risk. If you would invest 3,080 in INVITATION HOMES DL on August 29, 2024 and sell it today you would earn a total of 160.00 from holding INVITATION HOMES DL or generate 5.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INVITATION HOMES DL vs. DFS Furniture PLC
Performance |
| Timeline |
| INVITATION HOMES |
| DFS Furniture PLC |
INVITATION HOMES and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INVITATION HOMES and DFS Furniture
The main advantage of trading using opposite INVITATION HOMES and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INVITATION HOMES position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| INVITATION HOMES vs. Superior Plus Corp | INVITATION HOMES vs. NMI Holdings | INVITATION HOMES vs. Origin Agritech | INVITATION HOMES vs. SIVERS SEMICONDUCTORS AB |
| DFS Furniture vs. Sunny Optical Technology | DFS Furniture vs. CITY OFFICE REIT | DFS Furniture vs. Luckin Coffee | DFS Furniture vs. SWISS WATER DECAFFCOFFEE |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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