Correlation Between Landsea Homes and Xinyuan Real
Can any of the company-specific risk be diversified away by investing in both Landsea Homes and Xinyuan Real 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 Landsea Homes and Xinyuan Real into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Landsea Homes Corp and Xinyuan Real Estate, you can compare the effects of market volatilities on Landsea Homes and Xinyuan Real 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 Landsea Homes with a short position of Xinyuan Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Landsea Homes and Xinyuan Real.
Diversification Opportunities for Landsea Homes and Xinyuan Real
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Landsea and Xinyuan is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Landsea Homes Corp and Xinyuan Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinyuan Real Estate and Landsea 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 Landsea Homes Corp are associated (or correlated) with Xinyuan Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinyuan Real Estate has no effect on the direction of Landsea Homes i.e., Landsea Homes and Xinyuan Real go up and down completely randomly.
Pair Corralation between Landsea Homes and Xinyuan Real
Given the investment horizon of 90 days Landsea Homes Corp is expected to generate 0.54 times more return on investment than Xinyuan Real. However, Landsea Homes Corp is 1.84 times less risky than Xinyuan Real. It trades about 0.07 of its potential returns per unit of risk. Xinyuan Real Estate is currently generating about 0.02 per unit of risk. If you would invest 535.00 in Landsea Homes Corp on August 28, 2024 and sell it today you would earn a total of 635.00 from holding Landsea Homes Corp or generate 118.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Landsea Homes Corp vs. Xinyuan Real Estate
Performance |
| Timeline |
| Landsea Homes Corp |
| Xinyuan Real Estate |
Landsea Homes and Xinyuan Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Landsea Homes and Xinyuan Real
The main advantage of trading using opposite Landsea Homes and Xinyuan Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landsea Homes position performs unexpectedly, Xinyuan Real 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 Xinyuan Real will offset losses from the drop in Xinyuan Real's long position.| Landsea Homes vs. GCM Grosvenor | Landsea Homes vs. AerSale Corp | Landsea Homes vs. Arko Corp | Landsea Homes vs. Advantage Solutions |
| Xinyuan Real vs. Investcorp Credit Management | Xinyuan Real vs. Medalist Diversified Reit | Xinyuan Real vs. Aquagold International | Xinyuan Real vs. Morningstar Unconstrained Allocation |
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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