Correlation Between Five Point and Safe
Can any of the company-specific risk be diversified away by investing in both Five Point and Safe 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 Five Point and Safe into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Five Point Holdings and Safe and Green, you can compare the effects of market volatilities on Five Point and Safe 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 Five Point with a short position of Safe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Five Point and Safe.
Diversification Opportunities for Five Point and Safe
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Five and Safe is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Five Point Holdings and Safe and Green in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safe and Green and Five Point 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 Five Point Holdings are associated (or correlated) with Safe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safe and Green has no effect on the direction of Five Point i.e., Five Point and Safe go up and down completely randomly.
Pair Corralation between Five Point and Safe
Considering the 90-day investment horizon Five Point is expected to generate 5.23 times less return on investment than Safe. But when comparing it to its historical volatility, Five Point Holdings is 12.21 times less risky than Safe. It trades about 0.03 of its potential returns per unit of risk. Safe and Green is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 13,200 in Safe and Green on September 12, 2024 and sell it today you would lose (12,966) from holding Safe and Green or give up 98.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.07% |
| Values | Daily Returns |
Five Point Holdings vs. Safe and Green
Performance |
| Timeline |
| Five Point Holdings |
| Safe and Green |
Five Point and Safe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Five Point and Safe
The main advantage of trading using opposite Five Point and Safe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Five Point position performs unexpectedly, Safe 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 Safe will offset losses from the drop in Safe's long position.| Five Point vs. Sun Hung Kai | Five Point vs. Bayport International Holdings | Five Point vs. Landsea Homes Corp | Five Point vs. American Realty Investors |
| Safe vs. Sun Hung Kai | Safe vs. Bayport International Holdings | Safe vs. Landsea Homes Corp | Safe vs. American Realty Investors |
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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