Correlation Between LGI Homes and 713448FS2
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By analyzing existing cross correlation between LGI Homes and PEP 445 15 FEB 33, you can compare the effects of market volatilities on LGI Homes and 713448FS2 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 713448FS2. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and 713448FS2.
Diversification Opportunities for LGI Homes and 713448FS2
Poor diversification
The 3 months correlation between LGI and 713448FS2 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and PEP 445 15 FEB 33 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEP 445 15 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 713448FS2. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEP 445 15 has no effect on the direction of LGI Homes i.e., LGI Homes and 713448FS2 go up and down completely randomly.
Pair Corralation between LGI Homes and 713448FS2
Given the investment horizon of 90 days LGI Homes is expected to under-perform the 713448FS2. In addition to that, LGI Homes is 4.69 times more volatile than PEP 445 15 FEB 33. It trades about -0.01 of its total potential returns per unit of risk. PEP 445 15 FEB 33 is currently generating about -0.02 per unit of volatility. If you would invest 10,196 in PEP 445 15 FEB 33 on September 12, 2024 and sell it today you would lose (265.00) from holding PEP 445 15 FEB 33 or give up 2.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.76% |
| Values | Daily Returns |
LGI Homes vs. PEP 445 15 FEB 33
Performance |
| Timeline |
| LGI Homes |
| PEP 445 15 |
LGI Homes and 713448FS2 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and 713448FS2
The main advantage of trading using opposite LGI Homes and 713448FS2 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, 713448FS2 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 713448FS2 will offset losses from the drop in 713448FS2'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 |
| 713448FS2 vs. Bassett Furniture Industries | 713448FS2 vs. LGI Homes | 713448FS2 vs. NL Industries | 713448FS2 vs. Origin Materials |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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