Correlation Between Guild Holdings and CNFinance Holdings
Can any of the company-specific risk be diversified away by investing in both Guild Holdings and CNFinance Holdings 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 Guild Holdings and CNFinance Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guild Holdings Co and CNFinance Holdings, you can compare the effects of market volatilities on Guild Holdings and CNFinance Holdings 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 Guild Holdings with a short position of CNFinance Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Holdings and CNFinance Holdings.
Diversification Opportunities for Guild Holdings and CNFinance Holdings
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guild and CNFinance is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co and CNFinance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNFinance Holdings and Guild 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 Guild Holdings Co are associated (or correlated) with CNFinance Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNFinance Holdings has no effect on the direction of Guild Holdings i.e., Guild Holdings and CNFinance Holdings go up and down completely randomly.
Pair Corralation between Guild Holdings and CNFinance Holdings
Given the investment horizon of 90 days Guild Holdings Co is expected to generate 0.28 times more return on investment than CNFinance Holdings. However, Guild Holdings Co is 3.58 times less risky than CNFinance Holdings. It trades about -0.06 of its potential returns per unit of risk. CNFinance Holdings is currently generating about -0.22 per unit of risk. If you would invest 1,400 in Guild Holdings Co on August 27, 2024 and sell it today you would lose (35.00) from holding Guild Holdings Co or give up 2.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guild Holdings Co vs. CNFinance Holdings
Performance |
| Timeline |
| Guild Holdings |
| CNFinance Holdings |
Guild Holdings and CNFinance Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Holdings and CNFinance Holdings
The main advantage of trading using opposite Guild Holdings and CNFinance Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Holdings position performs unexpectedly, CNFinance Holdings 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 CNFinance Holdings will offset losses from the drop in CNFinance Holdings' long position.| Guild Holdings vs. Mr Cooper Group | Guild Holdings vs. Encore Capital Group | Guild Holdings vs. CNFinance Holdings | Guild Holdings vs. Security National Financial |
| CNFinance Holdings vs. Guild Holdings Co | CNFinance Holdings vs. PennyMac Finl Svcs | CNFinance Holdings vs. Security National Financial | CNFinance Holdings vs. Encore Capital Group |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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