Correlation Between UNION HOMES and ABBEY MORTGAGE

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Can any of the company-specific risk be diversified away by investing in both UNION HOMES and ABBEY MORTGAGE 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 UNION HOMES and ABBEY MORTGAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNION HOMES SAVINGS and ABBEY MORTGAGE BANK, you can compare the effects of market volatilities on UNION HOMES and ABBEY MORTGAGE 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 UNION HOMES with a short position of ABBEY MORTGAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNION HOMES and ABBEY MORTGAGE.

Diversification Opportunities for UNION HOMES and ABBEY MORTGAGE

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between UNION and ABBEY is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding UNION HOMES SAVINGS and ABBEY MORTGAGE BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABBEY MORTGAGE BANK and UNION 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 UNION HOMES SAVINGS are associated (or correlated) with ABBEY MORTGAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABBEY MORTGAGE BANK has no effect on the direction of UNION HOMES i.e., UNION HOMES and ABBEY MORTGAGE go up and down completely randomly.

Pair Corralation between UNION HOMES and ABBEY MORTGAGE

If you would invest  266.00  in ABBEY MORTGAGE BANK on September 13, 2024 and sell it today you would earn a total of  14.00  from holding ABBEY MORTGAGE BANK or generate 5.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.65%
ValuesDaily Returns

UNION HOMES SAVINGS  vs.  ABBEY MORTGAGE BANK

 Performance 
       Timeline  
UNION HOMES SAVINGS 

Risk-Adjusted Performance

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Over the last 90 days UNION HOMES SAVINGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, UNION HOMES is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.
ABBEY MORTGAGE BANK 

Risk-Adjusted Performance

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Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in ABBEY MORTGAGE BANK are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, ABBEY MORTGAGE exhibited solid returns over the last few months and may actually be approaching a breakup point.

UNION HOMES and ABBEY MORTGAGE Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with UNION HOMES and ABBEY MORTGAGE

The main advantage of trading using opposite UNION HOMES and ABBEY MORTGAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNION HOMES position performs unexpectedly, ABBEY MORTGAGE 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 ABBEY MORTGAGE will offset losses from the drop in ABBEY MORTGAGE's long position.
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The idea behind UNION HOMES SAVINGS and ABBEY MORTGAGE BANK 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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