Correlation Between LGI Homes and 70137WAL2
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By analyzing existing cross correlation between LGI Homes and US70137WAL28, you can compare the effects of market volatilities on LGI Homes and 70137WAL2 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 70137WAL2. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and 70137WAL2.
Diversification Opportunities for LGI Homes and 70137WAL2
Poor diversification
The 3 months correlation between LGI and 70137WAL2 is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and US70137WAL28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US70137WAL28 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 70137WAL2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US70137WAL28 has no effect on the direction of LGI Homes i.e., LGI Homes and 70137WAL2 go up and down completely randomly.
Pair Corralation between LGI Homes and 70137WAL2
Given the investment horizon of 90 days LGI Homes is expected to generate 3.71 times more return on investment than 70137WAL2. However, LGI Homes is 3.71 times more volatile than US70137WAL28. It trades about 0.04 of its potential returns per unit of risk. US70137WAL28 is currently generating about -0.03 per unit of risk. If you would invest 9,043 in LGI Homes on October 24, 2024 and sell it today you would earn a total of 114.00 from holding LGI Homes or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
LGI Homes vs. US70137WAL28
Performance |
| Timeline |
| LGI Homes |
| US70137WAL28 |
LGI Homes and 70137WAL2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and 70137WAL2
The main advantage of trading using opposite LGI Homes and 70137WAL2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, 70137WAL2 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 70137WAL2 will offset losses from the drop in 70137WAL2'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 |
| 70137WAL2 vs. LGI Homes | 70137WAL2 vs. flyExclusive, | 70137WAL2 vs. Vornado Realty Trust | 70137WAL2 vs. Kilroy Realty 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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