Correlation Between Credit Acceptance and Lennar
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance and Lennar 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 Credit Acceptance and Lennar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Acceptance and Lennar, you can compare the effects of market volatilities on Credit Acceptance and Lennar 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 Credit Acceptance with a short position of Lennar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and Lennar.
Diversification Opportunities for Credit Acceptance and Lennar
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Credit and Lennar is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance and Lennar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lennar and Credit Acceptance 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 Credit Acceptance are associated (or correlated) with Lennar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lennar has no effect on the direction of Credit Acceptance i.e., Credit Acceptance and Lennar go up and down completely randomly.
Pair Corralation between Credit Acceptance and Lennar
If you would invest 32,500 in Credit Acceptance on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Credit Acceptance or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Credit Acceptance vs. Lennar
Performance |
| Timeline |
| Credit Acceptance |
| Lennar |
Credit Acceptance and Lennar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and Lennar
The main advantage of trading using opposite Credit Acceptance and Lennar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance position performs unexpectedly, Lennar 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 Lennar will offset losses from the drop in Lennar's long position.| Credit Acceptance vs. Paycom Software | Credit Acceptance vs. Zoom Video Communications | Credit Acceptance vs. Apartment Investment and | Credit Acceptance vs. Charter Communications |
| Lennar vs. Capital One Financial | Lennar vs. American Airlines Group | Lennar vs. Credit Acceptance | Lennar vs. Tres Tentos Agroindustrial |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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