Correlation Between UWM Holdings and Velocity Financial
Can any of the company-specific risk be diversified away by investing in both UWM Holdings and Velocity Financial 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 Velocity Financial 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 Velocity Financial Llc, you can compare the effects of market volatilities on UWM Holdings and Velocity Financial 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 Velocity Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of UWM Holdings and Velocity Financial.
Diversification Opportunities for UWM Holdings and Velocity Financial
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UWM and Velocity is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding UWM Holdings Corp and Velocity Financial Llc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Velocity Financial Llc 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 Velocity Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Velocity Financial Llc has no effect on the direction of UWM Holdings i.e., UWM Holdings and Velocity Financial go up and down completely randomly.
Pair Corralation between UWM Holdings and Velocity Financial
Given the investment horizon of 90 days UWM Holdings Corp is expected to under-perform the Velocity Financial. In addition to that, UWM Holdings is 2.65 times more volatile than Velocity Financial Llc. It trades about -0.23 of its total potential returns per unit of risk. Velocity Financial Llc is currently generating about 0.16 per unit of volatility. If you would invest 1,877 in Velocity Financial Llc on August 30, 2024 and sell it today you would earn a total of 167.00 from holding Velocity Financial Llc or generate 8.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UWM Holdings Corp vs. Velocity Financial Llc
Performance |
| Timeline |
| UWM Holdings Corp |
| Velocity Financial Llc |
UWM Holdings and Velocity Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UWM Holdings and Velocity Financial
The main advantage of trading using opposite UWM Holdings and Velocity Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UWM Holdings position performs unexpectedly, Velocity Financial 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 Velocity Financial will offset losses from the drop in Velocity Financial's long position.| UWM Holdings vs. Loandepot | UWM Holdings vs. Mr Cooper Group | UWM Holdings vs. PennyMac Finl Svcs | UWM Holdings vs. Walker Dunlop |
| Velocity Financial vs. Guild Holdings Co | Velocity Financial vs. Mr Cooper Group | Velocity Financial vs. Encore Capital Group | Velocity Financial vs. CNFinance Holdings |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |