Correlation Between MI Homes and FEDEX
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By analyzing existing cross correlation between MI Homes and FEDEX P, you can compare the effects of market volatilities on MI Homes and FEDEX 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 FEDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of MI Homes and FEDEX.
Diversification Opportunities for MI Homes and FEDEX
Significant diversification
The 3 months correlation between MHO and FEDEX is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding MI Homes and FEDEX P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEDEX P 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 FEDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEDEX P has no effect on the direction of MI Homes i.e., MI Homes and FEDEX go up and down completely randomly.
Pair Corralation between MI Homes and FEDEX
Considering the 90-day investment horizon MI Homes is expected to generate 1.9 times more return on investment than FEDEX. However, MI Homes is 1.9 times more volatile than FEDEX P. It trades about 0.09 of its potential returns per unit of risk. FEDEX P is currently generating about 0.08 per unit of risk. If you would invest 12,732 in MI Homes on September 1, 2024 and sell it today you would earn a total of 3,771 from holding MI Homes or generate 29.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 88.1% |
| Values | Daily Returns |
MI Homes vs. FEDEX P
Performance |
| Timeline |
| MI Homes |
| FEDEX P |
MI Homes and FEDEX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MI Homes and FEDEX
The main advantage of trading using opposite MI Homes and FEDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MI Homes position performs unexpectedly, FEDEX 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 FEDEX will offset losses from the drop in FEDEX's long position.| MI Homes vs. TRI Pointe Homes | MI Homes vs. Beazer Homes USA | MI Homes vs. Century Communities | MI Homes vs. Meritage |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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