Correlation Between LGI Homes and NCR Voyix
Can any of the company-specific risk be diversified away by investing in both LGI Homes and NCR Voyix 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 NCR Voyix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LGI Homes and NCR Voyix, you can compare the effects of market volatilities on LGI Homes and NCR Voyix 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 NCR Voyix. Check out your portfolio center. Please also check ongoing floating volatility patterns of LGI Homes and NCR Voyix.
Diversification Opportunities for LGI Homes and NCR Voyix
Good diversification
The 3 months correlation between LGI and NCR is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding LGI Homes and NCR Voyix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR Voyix 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 NCR Voyix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR Voyix has no effect on the direction of LGI Homes i.e., LGI Homes and NCR Voyix go up and down completely randomly.
Pair Corralation between LGI Homes and NCR Voyix
Given the investment horizon of 90 days LGI Homes is expected to under-perform the NCR Voyix. In addition to that, LGI Homes is 1.05 times more volatile than NCR Voyix. It trades about -0.01 of its total potential returns per unit of risk. NCR Voyix is currently generating about 0.0 per unit of volatility. If you would invest 1,591 in NCR Voyix on September 14, 2024 and sell it today you would lose (124.00) from holding NCR Voyix or give up 7.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LGI Homes vs. NCR Voyix
Performance |
| Timeline |
| LGI Homes |
| NCR Voyix |
LGI Homes and NCR Voyix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LGI Homes and NCR Voyix
The main advantage of trading using opposite LGI Homes and NCR Voyix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LGI Homes position performs unexpectedly, NCR Voyix 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 NCR Voyix will offset losses from the drop in NCR Voyix'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 |
| NCR Voyix vs. Celestica | NCR Voyix vs. LGI Homes | NCR Voyix vs. Boston Properties | NCR Voyix vs. JBG SMITH Properties |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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