Correlation Between CNFinance Holdings and Home Point
Can any of the company-specific risk be diversified away by investing in both CNFinance Holdings and Home Point 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 CNFinance Holdings and Home Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNFinance Holdings and Home Point Capital, you can compare the effects of market volatilities on CNFinance Holdings and Home Point 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 CNFinance Holdings with a short position of Home Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNFinance Holdings and Home Point.
Diversification Opportunities for CNFinance Holdings and Home Point
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CNFinance and Home is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding CNFinance Holdings and Home Point Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Point Capital and CNFinance Holdings 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 CNFinance Holdings are associated (or correlated) with Home Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Point Capital has no effect on the direction of CNFinance Holdings i.e., CNFinance Holdings and Home Point go up and down completely randomly.
Pair Corralation between CNFinance Holdings and Home Point
If you would invest 231.00 in Home Point Capital on August 24, 2024 and sell it today you would earn a total of 0.00 from holding Home Point Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
CNFinance Holdings vs. Home Point Capital
Performance |
| Timeline |
| CNFinance Holdings |
| Home Point Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
CNFinance Holdings and Home Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNFinance Holdings and Home Point
The main advantage of trading using opposite CNFinance Holdings and Home Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNFinance Holdings position performs unexpectedly, Home Point 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 Home Point will offset losses from the drop in Home Point's long position.| CNFinance Holdings vs. Guild Holdings Co | CNFinance Holdings vs. PennyMac Finl Svcs | CNFinance Holdings vs. Security National Financial | CNFinance Holdings vs. Encore Capital Group |
| Home Point vs. CNFinance Holdings | Home Point vs. Security National Financial | Home Point vs. Encore Capital Group | Home Point vs. Guild Holdings Co |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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