Correlation Between UWM Holdings and Equus Total
Can any of the company-specific risk be diversified away by investing in both UWM Holdings and Equus Total 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 UWM Holdings and Equus Total into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UWM Holdings Corp and Equus Total Return, you can compare the effects of market volatilities on UWM Holdings and Equus Total 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 UWM Holdings with a short position of Equus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of UWM Holdings and Equus Total.
Diversification Opportunities for UWM Holdings and Equus Total
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between UWM and Equus is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding UWM Holdings Corp and Equus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equus Total Return and UWM Holdings 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 UWM Holdings Corp are associated (or correlated) with Equus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equus Total Return has no effect on the direction of UWM Holdings i.e., UWM Holdings and Equus Total go up and down completely randomly.
Pair Corralation between UWM Holdings and Equus Total
Given the investment horizon of 90 days UWM Holdings is expected to generate 2.57 times less return on investment than Equus Total. But when comparing it to its historical volatility, UWM Holdings Corp is 1.79 times less risky than Equus Total. It trades about 0.15 of its potential returns per unit of risk. Equus Total Return is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Equus Total Return on November 1, 2024 and sell it today you would earn a total of 24.00 from holding Equus Total Return or generate 21.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UWM Holdings Corp vs. Equus Total Return
Performance |
| Timeline |
| UWM Holdings Corp |
| Equus Total Return |
UWM Holdings and Equus Total Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UWM Holdings and Equus Total
The main advantage of trading using opposite UWM Holdings and Equus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UWM Holdings position performs unexpectedly, Equus Total 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 Equus Total will offset losses from the drop in Equus Total's long position.| UWM Holdings vs. Loandepot | UWM Holdings vs. Mr Cooper Group | UWM Holdings vs. PennyMac Finl Svcs | UWM Holdings vs. Walker Dunlop |
| Equus Total vs. Rand Capital Corp | Equus Total vs. Gabelli Convertible And | Equus Total vs. Mfs Intermediate High | Equus Total vs. RENN Fund |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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