Correlation Between United Homes and 124857AF0

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Can any of the company-specific risk be diversified away by investing in both United Homes and 124857AF0 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 124857AF0 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 CBS P NEW, you can compare the effects of market volatilities on United Homes and 124857AF0 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 124857AF0. Check out your portfolio center. Please also check ongoing floating volatility patterns of United Homes and 124857AF0.

Diversification Opportunities for United Homes and 124857AF0

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between United and 124857AF0 is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding United Homes Group and CBS P NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CBS P NEW 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 124857AF0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CBS P NEW has no effect on the direction of United Homes i.e., United Homes and 124857AF0 go up and down completely randomly.

Pair Corralation between United Homes and 124857AF0

Considering the 90-day investment horizon United Homes Group is expected to under-perform the 124857AF0. In addition to that, United Homes is 1.82 times more volatile than CBS P NEW. It trades about -0.03 of its total potential returns per unit of risk. CBS P NEW is currently generating about 0.0 per unit of volatility. If you would invest  9,271  in CBS P NEW on September 12, 2024 and sell it today you would lose (497.00) from holding CBS P NEW or give up 5.36% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.97%
ValuesDaily Returns

United Homes Group  vs.  CBS P NEW

 Performance 
       Timeline  
United Homes Group 

Risk-Adjusted Performance

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Over the last 90 days United Homes Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's technical indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
CBS P NEW 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days CBS P NEW has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 124857AF0 is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

United Homes and 124857AF0 Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with United Homes and 124857AF0

The main advantage of trading using opposite United Homes and 124857AF0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United Homes position performs unexpectedly, 124857AF0 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 124857AF0 will offset losses from the drop in 124857AF0's long position.
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The idea behind United Homes Group and CBS P NEW pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.

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