Correlation Between Better Home and Citizens
Can any of the company-specific risk be diversified away by investing in both Better Home and Citizens 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 Better Home and Citizens into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Better Home Finance and Citizens, you can compare the effects of market volatilities on Better Home and Citizens 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 Better Home with a short position of Citizens. Check out your portfolio center. Please also check ongoing floating volatility patterns of Better Home and Citizens.
Diversification Opportunities for Better Home and Citizens
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Better and Citizens is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Better Home Finance and Citizens in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Citizens and Better Home 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 Better Home Finance are associated (or correlated) with Citizens. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Citizens has no effect on the direction of Better Home i.e., Better Home and Citizens go up and down completely randomly.
Pair Corralation between Better Home and Citizens
Given the investment horizon of 90 days Better Home Finance is expected to generate 1.31 times more return on investment than Citizens. However, Better Home is 1.31 times more volatile than Citizens. It trades about 0.16 of its potential returns per unit of risk. Citizens is currently generating about -0.14 per unit of risk. If you would invest 1,410 in Better Home Finance on September 3, 2024 and sell it today you would earn a total of 167.00 from holding Better Home Finance or generate 11.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Better Home Finance vs. Citizens
Performance |
| Timeline |
| Better Home Finance |
| Citizens |
Better Home and Citizens Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Better Home and Citizens
The main advantage of trading using opposite Better Home and Citizens positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Better Home position performs unexpectedly, Citizens 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 Citizens will offset losses from the drop in Citizens' long position.| Better Home vs. Citizens | Better Home vs. Employers Holdings | Better Home vs. Maanshan Iron Steel | Better Home vs. GoHealth |
| Citizens vs. CNO Financial Group | Citizens vs. Brighthouse Financial | Citizens vs. FG Annuities Life | Citizens vs. Prudential Public Limited |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |