Correlation Between Greystone Housing and Loandepot
Can any of the company-specific risk be diversified away by investing in both Greystone Housing and Loandepot 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 Greystone Housing and Loandepot into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greystone Housing Impact and Loandepot, you can compare the effects of market volatilities on Greystone Housing and Loandepot 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 Greystone Housing with a short position of Loandepot. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greystone Housing and Loandepot.
Diversification Opportunities for Greystone Housing and Loandepot
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Greystone and Loandepot is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Greystone Housing Impact and Loandepot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loandepot and Greystone Housing 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 Greystone Housing Impact are associated (or correlated) with Loandepot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loandepot has no effect on the direction of Greystone Housing i.e., Greystone Housing and Loandepot go up and down completely randomly.
Pair Corralation between Greystone Housing and Loandepot
Considering the 90-day investment horizon Greystone Housing Impact is expected to under-perform the Loandepot. But the stock apears to be less risky and, when comparing its historical volatility, Greystone Housing Impact is 3.32 times less risky than Loandepot. The stock trades about -0.08 of its potential returns per unit of risk. The Loandepot is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 181.00 in Loandepot on August 25, 2024 and sell it today you would earn a total of 53.00 from holding Loandepot or generate 29.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greystone Housing Impact vs. Loandepot
Performance |
| Timeline |
| Greystone Housing Impact |
| Loandepot |
Greystone Housing and Loandepot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greystone Housing and Loandepot
The main advantage of trading using opposite Greystone Housing and Loandepot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greystone Housing position performs unexpectedly, Loandepot 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 Loandepot will offset losses from the drop in Loandepot's long position.| Greystone Housing vs. Guild Holdings Co | Greystone Housing vs. Security National Financial | Greystone Housing vs. Encore Capital Group | Greystone Housing vs. PennyMac Finl Svcs |
| Loandepot vs. Encore Capital Group | Loandepot vs. Federal Home Loan | Loandepot vs. CNFinance Holdings | Loandepot vs. Greystone Housing Impact |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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