Correlation Between Gateway Real and LANDSEA HOMES
Can any of the company-specific risk be diversified away by investing in both Gateway Real and LANDSEA HOMES 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 Gateway Real and LANDSEA HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gateway Real Estate and LANDSEA HOMES P, you can compare the effects of market volatilities on Gateway Real and LANDSEA HOMES 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 Gateway Real with a short position of LANDSEA HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gateway Real and LANDSEA HOMES.
Diversification Opportunities for Gateway Real and LANDSEA HOMES
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gateway and LANDSEA is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gateway Real Estate and LANDSEA HOMES P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LANDSEA HOMES P and Gateway Real 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 Gateway Real Estate are associated (or correlated) with LANDSEA HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LANDSEA HOMES P has no effect on the direction of Gateway Real i.e., Gateway Real and LANDSEA HOMES go up and down completely randomly.
Pair Corralation between Gateway Real and LANDSEA HOMES
Assuming the 90 days trading horizon Gateway Real Estate is expected to under-perform the LANDSEA HOMES. In addition to that, Gateway Real is 2.43 times more volatile than LANDSEA HOMES P. It trades about -0.27 of its total potential returns per unit of risk. LANDSEA HOMES P is currently generating about -0.33 per unit of volatility. If you would invest 1,020 in LANDSEA HOMES P on September 24, 2024 and sell it today you would lose (195.00) from holding LANDSEA HOMES P or give up 19.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gateway Real Estate vs. LANDSEA HOMES P
Performance |
| Timeline |
| Gateway Real Estate |
| LANDSEA HOMES P |
Gateway Real and LANDSEA HOMES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gateway Real and LANDSEA HOMES
The main advantage of trading using opposite Gateway Real and LANDSEA HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gateway Real position performs unexpectedly, LANDSEA HOMES 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 LANDSEA HOMES will offset losses from the drop in LANDSEA HOMES's long position.| Gateway Real vs. Deutsche Wohnen SE | Gateway Real vs. TIMES CHINA HLDGS | Gateway Real vs. LANDSEA HOMES P | Gateway Real vs. Greenland Hong Kong |
| LANDSEA HOMES vs. Deutsche Wohnen SE | LANDSEA HOMES vs. Gateway Real Estate | LANDSEA HOMES vs. TIMES CHINA HLDGS | LANDSEA HOMES vs. Greenland Hong Kong |
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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