Correlation Between United Homes and FormFactor
Can any of the company-specific risk be diversified away by investing in both United Homes and FormFactor 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 United Homes and FormFactor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United Homes Group and FormFactor, you can compare the effects of market volatilities on United Homes and FormFactor 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 United Homes with a short position of FormFactor. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Homes and FormFactor.
Diversification Opportunities for United Homes and FormFactor
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between United and FormFactor is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and FormFactor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FormFactor and United 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 United Homes Group are associated (or correlated) with FormFactor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FormFactor has no effect on the direction of United Homes i.e., United Homes and FormFactor go up and down completely randomly.
Pair Corralation between United Homes and FormFactor
Considering the 90-day investment horizon United Homes Group is expected to under-perform the FormFactor. In addition to that, United Homes is 1.29 times more volatile than FormFactor. It trades about 0.0 of its total potential returns per unit of risk. FormFactor is currently generating about 0.03 per unit of volatility. If you would invest 3,490 in FormFactor on August 30, 2024 and sell it today you would earn a total of 441.00 from holding FormFactor or generate 12.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
United Homes Group vs. FormFactor
Performance |
| Timeline |
| United Homes Group |
| FormFactor |
United Homes and FormFactor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United Homes and FormFactor
The main advantage of trading using opposite United Homes and FormFactor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes position performs unexpectedly, FormFactor 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 FormFactor will offset losses from the drop in FormFactor's long position.| United Homes vs. Marine Products | United Homes vs. Rumble Inc | United Homes vs. Kaltura | United Homes vs. Bill Com Holdings |
| FormFactor vs. Silicon Laboratories | FormFactor vs. Diodes Incorporated | FormFactor vs. MACOM Technology Solutions | FormFactor vs. Amkor Technology |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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