Correlation Between GAMING FAC and M/I Homes
Can any of the company-specific risk be diversified away by investing in both GAMING FAC and M/I Homes 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 GAMING FAC and M/I Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAMING FAC SA and MI Homes, you can compare the effects of market volatilities on GAMING FAC and M/I Homes 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 GAMING FAC with a short position of M/I Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAMING FAC and M/I Homes.
Diversification Opportunities for GAMING FAC and M/I Homes
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GAMING and M/I is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding GAMING FAC SA and MI Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M/I Homes and GAMING FAC 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 GAMING FAC SA are associated (or correlated) with M/I Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M/I Homes has no effect on the direction of GAMING FAC i.e., GAMING FAC and M/I Homes go up and down completely randomly.
Pair Corralation between GAMING FAC and M/I Homes
Assuming the 90 days horizon GAMING FAC is expected to generate 2.53 times less return on investment than M/I Homes. In addition to that, GAMING FAC is 1.51 times more volatile than MI Homes. It trades about 0.03 of its total potential returns per unit of risk. MI Homes is currently generating about 0.12 per unit of volatility. If you would invest 4,200 in MI Homes on September 2, 2024 and sell it today you would earn a total of 11,275 from holding MI Homes or generate 268.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAMING FAC SA vs. MI Homes
Performance |
| Timeline |
| GAMING FAC SA |
| M/I Homes |
GAMING FAC and M/I Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAMING FAC and M/I Homes
The main advantage of trading using opposite GAMING FAC and M/I Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAMING FAC position performs unexpectedly, M/I Homes 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 M/I Homes will offset losses from the drop in M/I Homes' long position.| GAMING FAC vs. Nintendo Co | GAMING FAC vs. Sea Limited | GAMING FAC vs. Superior Plus Corp | GAMING FAC vs. NMI Holdings |
| M/I Homes vs. PTT Global Chemical | M/I Homes vs. BE Semiconductor Industries | M/I Homes vs. Mitsubishi Gas Chemical | M/I Homes vs. Taiwan Semiconductor Manufacturing |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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