Correlation Between LGI Homes and MICROSOFT
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By analyzing existing cross correlation between LGI Homes and MICROSOFT PORATION, you can compare the effects of market volatilities on LGI Homes and MICROSOFT 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 MICROSOFT. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and MICROSOFT.
Diversification Opportunities for LGI Homes and MICROSOFT
Very weak diversification
The 3 months correlation between LGI and MICROSOFT is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and MICROSOFT PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MICROSOFT PORATION 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 MICROSOFT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MICROSOFT PORATION has no effect on the direction of LGI Homes i.e., LGI Homes and MICROSOFT go up and down completely randomly.
Pair Corralation between LGI Homes and MICROSOFT
Given the investment horizon of 90 days LGI Homes is expected to generate 63.55 times less return on investment than MICROSOFT. In addition to that, LGI Homes is 2.31 times more volatile than MICROSOFT PORATION. It trades about 0.0 of its total potential returns per unit of risk. MICROSOFT PORATION is currently generating about 0.22 per unit of volatility. If you would invest 6,063 in MICROSOFT PORATION on September 13, 2024 and sell it today you would earn a total of 267.00 from holding MICROSOFT PORATION or generate 4.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LGI Homes vs. MICROSOFT PORATION
Performance |
| Timeline |
| LGI Homes |
| MICROSOFT PORATION |
LGI Homes and MICROSOFT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and MICROSOFT
The main advantage of trading using opposite LGI Homes and MICROSOFT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, MICROSOFT 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 MICROSOFT will offset losses from the drop in MICROSOFT's long position.| LGI Homes vs. Arhaus Inc | LGI Homes vs. Floor Decor Holdings | LGI Homes vs. Kingfisher plc | LGI Homes vs. Haverty Furniture Companies |
| MICROSOFT vs. LGI Homes | MICROSOFT vs. Mid Atlantic Home Health | MICROSOFT vs. Hooker Furniture | MICROSOFT vs. Cardinal Health |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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