Correlation Between Associated Capital and UWM Holdings
Can any of the company-specific risk be diversified away by investing in both Associated Capital and UWM Holdings 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 Associated Capital and UWM Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and UWM Holdings Corp, you can compare the effects of market volatilities on Associated Capital and UWM Holdings 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 Associated Capital with a short position of UWM Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and UWM Holdings.
Diversification Opportunities for Associated Capital and UWM Holdings
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and UWM is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and UWM Holdings Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UWM Holdings Corp and Associated Capital 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 Associated Capital Group are associated (or correlated) with UWM Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UWM Holdings Corp has no effect on the direction of Associated Capital i.e., Associated Capital and UWM Holdings go up and down completely randomly.
Pair Corralation between Associated Capital and UWM Holdings
Allowing for the 90-day total investment horizon Associated Capital is expected to generate 4.85 times less return on investment than UWM Holdings. But when comparing it to its historical volatility, Associated Capital Group is 1.93 times less risky than UWM Holdings. It trades about 0.0 of its potential returns per unit of risk. UWM Holdings Corp is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 490.00 in UWM Holdings Corp on January 14, 2025 and sell it today you would lose (32.50) from holding UWM Holdings Corp or give up 6.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. UWM Holdings Corp
Performance |
| Timeline |
| Associated Capital |
| UWM Holdings Corp |
Associated Capital and UWM Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and UWM Holdings
The main advantage of trading using opposite Associated Capital and UWM Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, UWM Holdings 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 UWM Holdings will offset losses from the drop in UWM Holdings' long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muniyield | Associated Capital vs. Brookfield Business Corp |
| UWM Holdings vs. Loandepot | UWM Holdings vs. Mr Cooper Group | UWM Holdings vs. PennyMac Finl Svcs | UWM Holdings vs. Walker Dunlop |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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