Correlation Between MI Homes and Lifevantage
Can any of the company-specific risk be diversified away by investing in both MI Homes and Lifevantage 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 MI Homes and Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MI Homes and Lifevantage, you can compare the effects of market volatilities on MI Homes and Lifevantage 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 MI Homes with a short position of Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Homes and Lifevantage.
Diversification Opportunities for MI Homes and Lifevantage
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MHO and Lifevantage is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding MI Homes and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage and MI 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 MI Homes are associated (or correlated) with Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of MI Homes i.e., MI Homes and Lifevantage go up and down completely randomly.
Pair Corralation between MI Homes and Lifevantage
Considering the 90-day investment horizon MI Homes is expected to generate 0.41 times more return on investment than Lifevantage. However, MI Homes is 2.45 times less risky than Lifevantage. It trades about -0.22 of its potential returns per unit of risk. Lifevantage is currently generating about -0.17 per unit of risk. If you would invest 13,526 in MI Homes on November 29, 2024 and sell it today you would lose (1,414) from holding MI Homes or give up 10.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MI Homes vs. Lifevantage
Performance |
| Timeline |
| MI Homes |
| Lifevantage |
MI Homes and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Homes and Lifevantage
The main advantage of trading using opposite MI Homes and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Homes position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| MI Homes vs. TRI Pointe Homes | MI Homes vs. Beazer Homes USA | MI Homes vs. Century Communities | MI Homes vs. Meritage |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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