Correlation Between UWM Holdings and Main Street
Can any of the company-specific risk be diversified away by investing in both UWM Holdings and Main Street 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 Main Street 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 Main Street Capital, you can compare the effects of market volatilities on UWM Holdings and Main Street 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 Main Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of UWM Holdings and Main Street.
Diversification Opportunities for UWM Holdings and Main Street
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UWM and Main is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding UWM Holdings Corp and Main Street Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Street Capital 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 Main Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Street Capital has no effect on the direction of UWM Holdings i.e., UWM Holdings and Main Street go up and down completely randomly.
Pair Corralation between UWM Holdings and Main Street
Given the investment horizon of 90 days UWM Holdings Corp is expected to generate 3.08 times more return on investment than Main Street. However, UWM Holdings is 3.08 times more volatile than Main Street Capital. It trades about 0.1 of its potential returns per unit of risk. Main Street Capital is currently generating about 0.22 per unit of risk. If you would invest 570.00 in UWM Holdings Corp on November 7, 2024 and sell it today you would earn a total of 32.00 from holding UWM Holdings Corp or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
UWM Holdings Corp vs. Main Street Capital
Performance |
| Timeline |
| UWM Holdings Corp |
| Main Street Capital |
UWM Holdings and Main Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UWM Holdings and Main Street
The main advantage of trading using opposite UWM Holdings and Main Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UWM Holdings position performs unexpectedly, Main Street 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 Main Street will offset losses from the drop in Main Street's long position.| UWM Holdings vs. Loandepot | UWM Holdings vs. Mr Cooper Group | UWM Holdings vs. PennyMac Finl Svcs | UWM Holdings vs. Walker Dunlop |
| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |