Correlation Between Home Point and CNFinance Holdings
Can any of the company-specific risk be diversified away by investing in both Home Point 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 Home Point and CNFinance Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Point Capital and CNFinance Holdings, you can compare the effects of market volatilities on Home Point 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 Home Point with a short position of CNFinance Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Point and CNFinance Holdings.
Diversification Opportunities for Home Point and CNFinance Holdings
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Home and CNFinance is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Home Point Capital and CNFinance Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNFinance Holdings and Home 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 Home Point Capital 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 Home Point i.e., Home Point and CNFinance Holdings go up and down completely randomly.
Pair Corralation between Home Point and CNFinance Holdings
If you would invest 231.00 in Home Point Capital on August 27, 2024 and sell it today you would earn a total of 0.00 from holding Home Point Capital or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Home Point Capital vs. CNFinance Holdings
Performance |
| Timeline |
| Home Point Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CNFinance Holdings |
Home Point and CNFinance Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Point and CNFinance Holdings
The main advantage of trading using opposite Home Point and CNFinance Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Point 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.| Home Point vs. CNFinance Holdings | Home Point vs. Security National Financial | Home Point vs. Encore Capital Group | Home Point vs. Guild Holdings Co |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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