Correlation Between Guild Holdings and Velocity Financial
Can any of the company-specific risk be diversified away by investing in both Guild Holdings and Velocity Financial 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 Velocity Financial 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 Velocity Financial Llc, you can compare the effects of market volatilities on Guild Holdings and Velocity Financial 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 Velocity Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guild Holdings and Velocity Financial.
Diversification Opportunities for Guild Holdings and Velocity Financial
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Guild and Velocity is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Guild Holdings Co and Velocity Financial Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velocity Financial Llc 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 Velocity Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velocity Financial Llc has no effect on the direction of Guild Holdings i.e., Guild Holdings and Velocity Financial go up and down completely randomly.
Pair Corralation between Guild Holdings and Velocity Financial
Given the investment horizon of 90 days Guild Holdings Co is expected to under-perform the Velocity Financial. In addition to that, Guild Holdings is 2.06 times more volatile than Velocity Financial Llc. It trades about -0.06 of its total potential returns per unit of risk. Velocity Financial Llc is currently generating about 0.33 per unit of volatility. If you would invest 1,927 in Velocity Financial Llc on August 27, 2024 and sell it today you would earn a total of 121.00 from holding Velocity Financial Llc or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guild Holdings Co vs. Velocity Financial Llc
Performance |
| Timeline |
| Guild Holdings |
| Velocity Financial Llc |
Guild Holdings and Velocity Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guild Holdings and Velocity Financial
The main advantage of trading using opposite Guild Holdings and Velocity Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guild Holdings position performs unexpectedly, Velocity Financial 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 Velocity Financial will offset losses from the drop in Velocity Financial's 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 |
| Velocity Financial vs. National Bank Holdings | Velocity Financial vs. Community West Bancshares | Velocity Financial vs. Financial Institutions | Velocity Financial vs. Kearny Financial Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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