Correlation Between LGI Homes and China VTV
Can any of the company-specific risk be diversified away by investing in both LGI Homes and China VTV 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 LGI Homes and China VTV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI Homes and China VTV, you can compare the effects of market volatilities on LGI Homes and China VTV 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 LGI Homes with a short position of China VTV. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and China VTV.
Diversification Opportunities for LGI Homes and China VTV
Pay attention - limited upside
The 3 months correlation between LGI and China is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and China VTV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China VTV and LGI Homes 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 LGI Homes are associated (or correlated) with China VTV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China VTV has no effect on the direction of LGI Homes i.e., LGI Homes and China VTV go up and down completely randomly.
Pair Corralation between LGI Homes and China VTV
If you would invest 9,336 in LGI Homes on September 14, 2024 and sell it today you would earn a total of 903.00 from holding LGI Homes or generate 9.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LGI Homes vs. China VTV
Performance |
| Timeline |
| LGI Homes |
| China VTV |
LGI Homes and China VTV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and China VTV
The main advantage of trading using opposite LGI Homes and China VTV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, China VTV 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 China VTV will offset losses from the drop in China VTV's long position.| LGI Homes vs. MI Homes | LGI Homes vs. Taylor Morn Home | LGI Homes vs. TRI Pointe Homes | LGI Homes vs. Beazer Homes USA |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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