Correlation Between Gen Digital and Invitation Homes
Can any of the company-specific risk be diversified away by investing in both Gen Digital and Invitation Homes 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 Gen Digital and Invitation Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gen Digital and Invitation Homes, you can compare the effects of market volatilities on Gen Digital and Invitation Homes 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 Gen Digital with a short position of Invitation Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gen Digital and Invitation Homes.
Diversification Opportunities for Gen Digital and Invitation Homes
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gen and Invitation is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Gen Digital and Invitation Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invitation Homes and Gen Digital 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 Gen Digital are associated (or correlated) with Invitation Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invitation Homes has no effect on the direction of Gen Digital i.e., Gen Digital and Invitation Homes go up and down completely randomly.
Pair Corralation between Gen Digital and Invitation Homes
If you would invest 3,885 in Invitation Homes on October 16, 2024 and sell it today you would earn a total of 4.00 from holding Invitation Homes or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.94% |
| Values | Daily Returns |
Gen Digital vs. Invitation Homes
Performance |
| Timeline |
| Gen Digital |
| Invitation Homes |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gen Digital and Invitation Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gen Digital and Invitation Homes
The main advantage of trading using opposite Gen Digital and Invitation Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gen Digital position performs unexpectedly, Invitation Homes 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 Invitation Homes will offset losses from the drop in Invitation Homes' long position.| Gen Digital vs. MAHLE Metal Leve | Gen Digital vs. Metalurgica Gerdau SA | Gen Digital vs. METISA Metalrgica Timboense | Gen Digital vs. Nordon Indstrias Metalrgicas |
| Invitation Homes vs. Air Products and | Invitation Homes vs. Unifique Telecomunicaes SA | Invitation Homes vs. TAL Education Group | Invitation Homes vs. Alaska Air Group, |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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